10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2013.
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____.

Commission File Number: 001-31569

CANTERBURY PARK HOLDING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Minnesota		41-1775532
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or		Identification
Organization)		No.)
	1100 Canterbury Road
	Shakopee, MN 55379
	(Address of principal executive offices and zip code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES X NO

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

YES X NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Exchange Act Rule 12b-2).

Large accelerated filer	Accelerated filer
Non-accelerated filer	Smaller reporting company	X

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).

YES NO X

The Company had 4,172,321 shares of common stock, $.01 par value, outstanding as of August 13, 2013.

1

Canterbury Park Holding Corporation

INDEX

			Page
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements (unaudited)
		Condensed Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012	3
		Condensed Consolidated Statements of Operations for the periods Ended June 30, 2013 and 2012	4
		Condensed Consolidated Statements of Cash Flows for the periods Ended June 30, 2013 and 2012	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
	Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	25
	Item 1A.	Risk Factors	25
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
	Item 3.	Defaults Upon Senior Securities	25
	Item 4.	Mine Safety Disclosures	25
	Item 5.	Other Information	25
	Item 6.	Exhibits	26
	Signatures		27
	Certifications		28

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PART 1 – FINANCIAL INFORMATION

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2013 AND DECEMBER 31, 2012

	June 30, 2013 (Unaudited)		December 31, 2012
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	7,681,434	$	9,384,983
Restricted cash		3,416,858		1,605,789
Short-term investments		203,581		203,195
Accounts receivable, net of allowance of $4,468 and $27,773, respectively		783,165		412,440
Inventory		293,806		212,072
Prepaid expenses		1,141,808		488,999
Deferred income taxes		339,400		425,100
Income taxes receivable		548,532		3,746
Due from Minnesota horsemen associations		—		16,829
Total current assets		14,408,584		12,753,153
LONG-TERM ASSETS
Deposits		26,400		26,400
Land, buildings and equipment, net of accumulated depreciation of $21,413,966 and $22,021,944, respectively		24,697,288		22,119,959
	$	39,132,272	$	34,899,512
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	6,651,723	$	2,785,534
Card Casino accruals		1,049,187		1,479,669
Accrued wages and payroll taxes		998,293		1,034,421
Due to MHBPA		218,429		548,300
Accrued property taxes		649,972		649,187
Payable to horsepersons		44,510		23,375
Total current liabilities		9,612,114		6,520,486
LONG-TERM LIABILITIES
Deferred income taxes		1,635,000		1,254,300
Stock appreciation rights		348,042		239,788
Total long-term liabilities		1,983,042		1,494,088
COMMITMENTS AND CONTINGENCIES (NOTE 6)
STOCKHOLDERS’ EQUITY
Common stock, $.01 par value, 10,000,000 shares authorized, 4,170,318 and 4,147,743, respectively, shares issued and outstanding		41,703		41,477
Additional paid-in capital		17,075,141		16,903,245
Retained earnings		10,420,272		9,940,216
Total stockholders’ equity		27,537,116		26,884,938
	$	39,132,272	$	34,899,512

See notes to condensed consolidated financial statements.

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CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

PERIODS ENDED JUNE 30, 2013 AND 2012 (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
OPERATING REVENUES:
Pari-mutuel	$	3,691,728		$	3,095,486		$	5,268,686		$	4,871,317
Card Casino		6,536,394			6,050,038			12,879,677			12,593,111
Concessions		1,931,573			1,796,079			2,778,999			2,728,873
Other		1,186,154			1,075,935			1,597,046			1,473,431
Total Revenues		13,345,849			12,017,538			22,524,408			21,666,732
Less: Promotional Allowances		(64,899	)		(53,454	)		(98,890	)		(93,938	)
Net Revenues		13,280,950			11,964,084			22,425,518			21,572,794
OPERATING EXPENSES:
Purse expense		1,975,348			1,829,069			2,840,461			2,750,800
Minnesota Breeders’ Fund		250,744			234,719			399,077			394,648
Other pari-mutuel expenses		515,415			468,686			844,350			821,510
Salaries and benefits		5,447,531			5,174,074			9,856,521			9,361,649
Cost of sales		1,029,947			985,897			1,554,813			1,520,941
Depreciation		446,640			411,000			893,280			884,580
Utilities		313,876			276,129			580,206			502,939
Advertising and marketing		686,482			484,470			867,805			680,282
Gain on disposal of assets		(6,700	)		—			(1,752	)		—
Other operating expenses		2,289,343			2,393,390			3,752,805			3,943,836
		12,948,626			12,257,434			21,587,566			20,861,185
INCOME (LOSS) FROM OPERATIONS		332,324			(293,350	)		837,952			711,609
NONOPERATING REVENUES:
Interest income		571			2,225			1,672			3,339
		571			2,225			1,672			3,339
INCOME (LOSS) BEFORE INCOME TAXES		332,895			(291,125	)		839,624			714,948
INCOME TAX (EXPENSE) BENEFIT		(139,647	)		124,589			(355,295	)		(348,980	)
NET INCOME (LOSS)	$	193,248		$	(166,536	)	$	484,329		$	365,968
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		4,157,305			4,115,771			4,153,819			4,113,901
WEIGHTED AVERAGE NUMBER OF DILUTIVE SHARES OUTSTANDING		4,182,727			4,115,771			4,173,620			4,162,094
BASIC NET INCOME (LOSS) PER COMMON SHARE	$	.05		$	(.04	)	$	.12		$	.09
DILUTED NET INCOME (LOSS) PER COMMON SHARE	$	.05		$	(.04	)	$	.12		$	.09

See notes to condensed consolidated financial statements.

4

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

PERIODS ENDED JUNE 30, 2013 AND 2012 (Unaudited)

	Six Months Ended June 30,
	2013			2012
Operating Activities:
Net income	$	484,329		$	365,968
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		893,280			884,580
Stock-based compensation expense		140,563			91,558
Increase (decrease) in deferred income taxes		466,400			(293,300	)
Tax expense (benefit) from exercise of stock options and restricted stock issuance		4,319			(27,289	)
Gain on disposal of assets		(1,752	)		—
Changes in operating assets and liabilities:
Increase in restricted cash		(1,811,069	)		(1,369,351	)
Increase in accounts receivable		(370,725	)		(318,870	)
Increase in other current assets		(734,543	)		(389,749	)
Increase in income taxes receivable		(549,105	)		(213,721	)
Increase in accounts payable and accrued wages and payroll taxes		3,752,147			2,899,089
(Decrease) increase in Card Casino accruals		(430,482	)		22,994
Increase in stock appreciation rights		108,254			117,226
Increase in accrued property taxes		785			2,977
Increase in payable to horsepersons		21,135			46,506
Decrease in due to MHBPA		(313,042	)		(53,116	)
Net cash provided by operating activities		1,660,494			1,765,502
Investing Activities:
Additions to buildings and equipment		(3,397,642	)		(753,553	)
Proceeds from sale of assets		6,700			—
Purchase of investments		(386	)		(957	)
Net cash used in investing activities		(3,391,328	)		(754,510	)
Financing Activities
Common stock repurchases		(7,509	)		—
Proceeds from issuance of common stock		39,113			183,011
Tax (expense) benefit from exercise of stock options and restricted stock issuance		(4,319	)		27,289
Net cash provided by financing activities		27,285			210,300
Net (decrease) increase in cash and cash equivalents		(1,703,549	)		1,221,292
Cash and cash equivalents at beginning of period		9,384,983			8,268,779
Cash and cash equivalents at end of period	$	7,681,434		$	9,490,071
Supplemental disclosure of noncash investing and financing activities:
Additions to buildings and equipment funded through accounts payable	$	101,477		$	88,999
Dividend declared		—			1,035,475
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$	438,000		$	856,000

See notes to condensed consolidated financial statements.

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CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PERIODS ENDED JUNE 30, 2013 AND 2012 (Unaudited)

	The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, and, in the opinion of management, contain all adjustments necessary to present fairly, in accordance with accounting principles generally accepted in the United States of America (GAAP), the financial position of Canterbury Park Holding Corporation as of June 30, 2013 and December 31, 2012, the results of its operations for the three and six months ended June 30, 2013 and 2012, and the results of its cash flows for the six months ended June 30, 2013 and 2012. The condensed consolidated balance sheet as of December 31, 2012 was derived from the audited financial statements. All adjustments are of a normal, recurring nature, except as otherwise disclosed. Results for an interim period are not necessarily indicative of results for a full year.
	The complete summary of significant accounting policies is included in the notes to consolidated financial statements in the Company’s 2012 Annual Report on Form 10-K.
1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	Business – Canterbury Park Holding Corporation (the “Company”) was incorporated under the laws of Minnesota and acquired land and buildings to conduct pari-mutuel horse racing operations (the “Racetrack”) in March 1994. The Racetrack is located in Shakopee, Minnesota, approximately 25 miles southwest of downtown Minneapolis. In May 1994, we commenced year-round horse racing simulcast operations and hosted the first annual live race meet during the summer of 1995. Our live racing operations are a seasonal business as we host live race meets each year from May until September. We earn additional pari-mutuel revenue by televising our live racing to out-of-state racetracks around the country. Canterbury Park’s Card Casino operates 24 hours a day, seven days a week and is limited by Minnesota State law to a maximum of 80 tables. Prior to May 4, 2012, the Company was limited to a maximum of 50 tables. The Card Casino currently offers a variety of poker and table games. Our three largest sources of revenues, Card Casino operations, pari-mutuel operations and concessions sales, generate cash revenues. We also derive revenues from related services and activities, such as advertising, parking and publication sales and from other entertainment events and activities held at the Racetrack.
	Revenue Recognition – Our revenues are derived primarily from the operations of a Card Casino, pari-mutuel wagering on simulcast and live horse races, concession sales, and related activities. Collection revenue from Card Casino operations, a set percentage of wagers, is recognized at the time that the wagering process is complete. Pari-mutuel revenues are recognized upon occurrence of the live race that is presented for wagering and after that live race is made official by the respective state’s racing regulatory body. Revenues related to concession and publication sales and parking and admission fees are recognized as revenue when the service has been performed or the product has been delivered. All sales taxes are presented on a net basis and are excluded from revenue.
	Estimates – The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
	Cash and Cash Equivalents – Cash and cash equivalents include all investments with original maturities of three months or less or which are readily convertible into known amounts of cash and are not legally restricted. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

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Restricted Cash – Restricted cash represents refundable deposits and amounts due to horsemen for purses, stakes and awards, and amounts accumulated in card game progressive jackpot pools, the player pool and poker promotional fund to be used to repay card players in the form of promotions, giveaways, prizes, or by other means.

Short-term Investments – Securities are classified as held to maturity when the Company has the positive intent and ability to hold them to maturity, and are measured at amortized cost. At June 30, 2013 and December 31, 2012, all investments were classified as held-to-maturity. The Company continually reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary. If the decline in fair value is judged to be other than temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in earnings. Short-term investments consist of certificates of deposits at June 30, 2013 and December 31, 2012. Amortized cost approximated fair value for both periods.

Accounts Receivable – Accounts receivable are initially recorded for amounts due from other tracks for simulcast revenue, net of amounts due to other tracks, and for amounts due from customers related to special events. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments. Accounts that are outstanding longer than the contractual terms are considered past due. When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our day-to-day knowledge of specific customers. We write off accounts receivable when they become uncollectible. Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in other operating expenses in our consolidated statements of operations.

Inventory – Inventory consists primarily of food and beverages, small wares and supplies and retail goods and are recorded at the lower of cost (first-in, first-out) or market.

Unredeemed Pari-mutuel Tickets – The Company records a liability for winning tickets and vouchers upon the completion of a race and when a voucher is printed, respectively. As uncashed winning tickets and vouchers are redeemed, this liability is reduced for the respective cash payment. We recognize revenue associated with the uncashed winning tickets and vouchers when the likelihood of redemption, based on historical experience, is remote. While we continue to honor all winning tickets and vouchers presented for payment, management may determine the likelihood of redemption to be remote due to the length of time that has elapsed since the ticket was issued. In these circumstances, if management also determines there is no requirement for remitting balances to government agencies under unclaimed property laws, uncashed winning tickets and vouchers may then be recognized as revenue in our Condensed Consolidated Statements of Operations. During the quarter ended June 30, 2013, the Company reevaluated the likelihood of redemption relating to outstanding vouchers and through this assessment, the Company decreased the projected redemption rate. The Company has determined that this adjustment to the likelihood of redemption relating to vouchers is a change in accounting estimate and has accounted for the change prospectively; i.e. the accounting change impacts interim reporting periods within fiscal year 2013 and future periods. For the three months ended June 30, 2013, the change in accounting estimate decreased our liability for outstanding pari-mutuel vouchers and increased Pari-mutuel Revenue in our Condensed Consolidation Statements of Operations for the period by approximately $412,286 (pre-tax difference), increasing Income From Operations by this amount as well. Net Income increased approximately $239,150 (after taking income taxes into account), or by approximately $0.06 earnings per basic and diluted common share.

Promotional Allowances – The Company offers certain promotional allowances at no charge to patrons who participate in our player rewards program. The retail value of these promotional items is shown as a deduction from total revenues on the Company’s consolidated statements of operations.

Due to Minnesota Horsemen’s Benevolent and Protective Association, Inc. (“MHBPA”) – The Minnesota Pari-mutuel Horse Racing Act specifies that the Company is required to segregate a portion of funds (recorded as purse expense in the statements of operations), received from Card Casino operations and wagering on simulcast and live horse races, for future payment as purses for live horse races or other uses of the horsepersons’ associations. Pursuant to an agreement with the MHBPA, the Company transferred into a trust account or paid directly to the MHBPA, approximately $2,925,000 and $2,575,000 for the three-month periods ending June 30, 2013 and 2012, respectively related to thoroughbred races. Minnesota Statutes specify that amounts transferred into the trust account are the property of the trust and not of the Company.

7

Impairment of Long-Lived Assets – Management of the Company periodically reviews the carrying value of property and equipment for potential impairment by comparing the carrying value of these assets with their related expected undiscounted future net cash flows. Should the sum of the related expected future net cash flows be less than the carrying value, management will determine whether an impairment loss should be recognized. An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. Management has determined that no impairment of these assets exists at June 30, 2013.

Advertising and Marketing – Advertising and marketing costs are charged to expense as incurred. The related amounts are presented separately in the Company’s consolidated statements of operations.

Land, Buildings, and Equipment – Land, buildings, equipment, and building improvements are capitalized at a level of $1,000 or greater and are recorded at cost. Repair and maintenance costs are charged to operations when incurred. Furniture, fixtures, and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 – 7 years, while buildings are depreciated over 15 – 39 years. Building improvements are amortized using the straight-line method over the useful life of the assets.

Card Casino Accruals – Minnesota law allows the Company to collect amounts from patrons to fund progressive jackpot pools in the Card Casino. These amounts, along with amounts earned by the player pool, promotional pools and the outstanding chip liability, are accrued as short-term liabilities at each balance sheet date.

Income Taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to reverse.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Interest and penalties associated with uncertain income tax positions are presented in income tax expense. For the six months ended June 30, 2013 and 2012, we did not recognize any expense related to interest and penalties. Additionally, we do not have any amounts accrued at June 30, 2013 for the payment of interest and penalties.

Net Income Per Share – Basic net income per common share is based on the weighted average number of common shares outstanding during each year. Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding. The Company’s only potential common shares outstanding are stock options.

Fair Values of Financial Instruments – Due to the current classification of all financial instruments of the Company and given the short-term nature of the related account balances, carrying amounts reported in the consolidated balance sheets approximate fair value.

Stock Based Employee Compensation – The Company accounts for share based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized as expense over the requisite service period (generally the vesting period). The estimated fair value of each option is calculated using the Black-Scholes option-pricing model.

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2.	STOCK BASED COMPENSATION
	Stock based compensation is recorded at fair value as of the date of grant and included in the salaries and benefits expense line item on the consolidated statements of operations and amounted to $140,563 and $91,558 during the six months ended June 30, 2013 and 2012, respectively
	Board of Director Restricted Stock Grants
	Pursuant to Board action taken on April 15, 2011 and shareholder approval on June 2, 2011, the Company’s Stock Plan was amended to authorize annual grants of restricted stock or stock options, or both, as determined by the Board. Pursuant to the amended Stock Plan, on June 7, 2012, 2,364 shares of restricted stock were granted to each of the five non-employee members of the Board of Directors. The restricted stock will vest 100% after one year and will be subject to restrictions on resale for an additional year. The compensation cost related to this total restricted stock grant of 11,820 shares for the three months ended June 30, 2013 was $24,999. As of June 30, 2013, there was no unrecognized compensation cost related to this restricted stock grant.
	Additionally, on January 4, 2013, 1,250 shares of restricted stock were granted to a newly named non-employee member of the Board of Directors. The restricted stock will vest 100% after one year and will be subject to restrictions on resale for an additional year. The compensation cost related to this restricted stock grant of 1,250 shares for the three months ended June 30, 2013 was $3,125. As of June 30, 2013, there was $6,250 of total unrecognized compensation cost related to this restricted stock grant which is expected to be recognized over 0.5 years.
	Finally, on May 30, 2013, 2,840 shares of restricted stock were granted to each of the six non-employee members of the Board of Directors. The restricted stock will vest 100% after one year and will be subject to restrictions on resale for an additional year. The compensation cost related to this total restricted stock grant of 17,040 shares for the three months ended June 30, 2013 was $14,995. As of June 30, 2013, there was $164,947 of total unrecognized compensation cost related to this restricted stock grant which is expected to be recognized over 0.9 years.
	Employee Stock Option and Deferred Stock Award Grants
	On February 25, 2010, 86,500 incentive stock options were granted to employees with an exercise price equal to the market price on the date of grant of $8.28. The options vest over a 42-month period and expire in ten years. The compensation cost associated with this grant of employee options is $282,355 to be recognized as expense over the 42-month vesting period. The compensation cost related to these options is included in salaries and benefits expense for the six months ended June 30, 2013 and 2012 was $35,294. As of June 30, 2013, there was $11,765 of total unrecognized compensation cost related to these stock options which is expected to be recognized over 0.2 years.
	Additionally, on December 13, 2012, 20,500 shares of deferred stock awards were granted to employees with a price per share equal to the market price on the date of grant of $9.84. The awards vest ratably over a four-year period. The compensation cost associated with this grant of employee awards is $172,200 to be recognized as expense over the four-year vesting period. The compensation cost related to these awards is included in salaries and benefits expense for the six months ended June 30, 2013 was $21,525. As of June 30, 2013, there was $148,841 of total unrecognized compensation cost related to these deferred stock awards which is expected to be recognized over 3.5 years.

9

The number of shares that may be issued pursuant to restricted stock granted and the weighted average fair value during the periods presented were:

	Six Months Ended
	June 30, 2013				June 30, 2012
	Grant		Weighted Average Fair Value Per Share		Grant		Weighted Average Fair Value Per Share
Board restricted stock		18,290	$	10.52		11,820	$	12.69
Total shares		18,290				11,820

A summary of stock option activity as of June 30, 2013 and changes during the six months then ended is presented below:

Stock Options	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Grant Date Fair Value
Outstanding at January 1, 2013		292,267		$	10.13
Granted		—			—
Exercised		(1,419	)	$	6.40
Expired/Forfeited		(15,000	)	$	13.86
Outstanding at June 30, 2013		275,848		$	9.95		5.1 Years	$	2,744,613
Exercisable at June 30, 2013		255,973		$	10.08		5.0 Years	$	2,580,048

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A summary of stock option activity as of June 30, 2012 and changes during the six months then ended is presented below:

Stock Options	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Grant Date Fair Value
Outstanding at January 1, 2012		318,002		$	9.21
Granted		—			—
Exercised		(19,750	)	$	7.23
Expired/Forfeited		—			—
Outstanding at June 30, 2012		298,252		$	10.06		5.8 Years	$	3,000,852
Exercisable at June 30, 2012		246,752		$	10.57		5.6 Years	$	2,607,492

Employee Stock Ownership Plan

Prior to 2008, the Company contributed shares of its common stock to its Employee Stock Ownership Plan (the “ESOP”). However, no contributions have been made from January 1, 2008 to date, and the Company has not taken any action to reinstate contributions to the ESOP. During the first quarter of 2013, the Company’s Board of Directors approved an action to combine the ESOP with the 401(k) Plan to create a KSOP Plan. This KSOP Plan will allow the Company to use Company stock to match contributions from its employees should it so choose. This combination became effective on July 15, 2013.

Employee Stock Purchase Plan

On April 3, 1995, the Board of Directors adopted an Employee Stock Purchase Plan (the “ESPP”). Pursuant to Board action taken in September 2011, the ESPP was amended so that stock is issued in three-month phases. The plan issued 1,574 shares during the second quarter of 2013 and 2,096 shares during the second quarter of 2012. The ESPP has issued a total of 256,415 shares since its inception. Pursuant to Board action taken on June 2, 2012, and effective during the third quarter of 2012, the discount offered to employees as part of the ESPP was raised 5% to 10%.

Stock Appreciation Rights (“SARs”)

As part of the Cooperative Marketing Agreement (the “Agreement”) discussed in Note 7, on June 14, 2012, the Company signed a Stock Appreciation Rights Agreement (the “SAR Agreement”) and issued SARs to non-employees. The SAR Agreement granted rights to non-employees to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties. Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30. Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013. The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price. SARs have no effect on dilutive shares or shares outstanding as any appreciation of the Company’s common stock value over the grant price is paid in cash and not in common stock. The SAR Agreement and all rights granted expire on December 31, 2022.

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The fair value of SARs is revalued (mark-to-market) each reporting period using the Black-Scholes valuation model based on the Company’s period-end stock price. The expected term of the SARs granted is based on the contractual term. Expected volatility is based on the historical volatility of the Company’s stock for the length of time corresponding to the expected term of the SARs. The expected dividend yield is based on the Company’s anticipated dividend payments. The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the reporting date for the length of time corresponding to the expected term of the SARs.

The following weighted-average assumptions were used in calculating the fair value of SARs during the six-month period ended June 30, 2013, using the Black-Scholes valuation model:

	June 30, 2013
Expected dividend yield		0.00	%
Expected weighted-average volatility		48.6	%
Risk-free interest rate		2.43	%
Expected term of SARs (in years)		9.50

There were no exercises during the three and six-month period ended June 30, 2013. The total fair value of SARs at June 30, 2013 was $348,042.

Changes to the Company’s non-vested SARs during the six-month period ended June 30, 2013, are as follows:

	SARs			Fair Value (*)
Non-vested SARs at December 31, 2012		148,500		$	5.24
Granted		—			—
Vested		(16,500	)	$	5.03
Cancellations		—			—
Non-vested SARs at June 30, 2013		132,000		$	5.03
* Weighted-average

3.

EARNINGS PER SHARE COMPUTATIONS

Basic net income per common share is based on the weighted average number of common shares outstanding during each period. Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding. The Company’s potential common shares outstanding are stock options. Options to purchase 104,500 shares of common stock at an average price of $14.44 per share were outstanding but not included in the computation of diluted earnings per share for both the three and six-month periods ending June 30, 2013 because the options were out of the money at June 30, 2013. Options to purchase 119,500 shares of common stock at an average price of $14.36 per share were outstanding but not included in the computation of diluted earnings per share for both the three and six-month period ending June 30, 2012 because the options were out of the money at June 30, 2012.

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The following is a reconciliation of the numerator and denominator of the earnings per common share computations for the three and six-month periods ending June 30, 2013 and 2012:

	Three Months Ended June 30, 2013		Three Months Ended June 30, 2012			Six Months Ended June 30, 2013		Six Months Ended June 30, 2012
Net income (loss) (numerator) amounts used for basic and diluted per share computations:	$	193,248	$	(166,536	)	$	484,329	$	365,968
Weighted average shares (denominator) of common stock outstanding:
Basic		4,157,305		4,115,771			4,153,819		4,113,901
Plus dilutive effect of stock options		25,422		—			19,801		48,193
Diluted		4,182,727		4,115,771			4,173,620		4,162,094
Net income (loss) per common share:
Basic	$	.05	$	(.04	)	$	.12	$	.09
Diluted		.05		(.04	)		.12		.09

4.	GENERAL CREDIT AGREEMENT
	The Company has a general credit agreement with Bremer Bank, which provides a revolving credit line of up to $3,000,000. On May 6, 2013, the Company signed an amendment with Bremer Bank extending the expiration date from May 5, 2013 to May 5, 2014, while keeping previous provisions intact. The Company had no borrowings under this credit line at June 30, 2013 and December 31, 2012. The credit agreement contains certain covenants requiring the Company to maintain certain financial ratios. The Company was in compliance with these requirements as of June 30, 2013.
5.	OPERATING SEGMENTS
	The Company has three reportable operating segments: horse racing, Card Casino, and concessions. The horse racing segment primarily represents simulcast and live horse racing operations and the operation of an RV park. The Card Casino segment represents operations of Canterbury Park’s Card Casino, and the concessions segment represents food and beverage operations provided during simulcast and live racing, in the Card Casino, and during special events. The Company’s reportable operating segments are strategic business units that offer different products and services. They are managed separately because the segments differ in the nature of the products and services provided as well as processes to produce those products and services. The Minnesota Racing Commission regulates the horse racing and Card Casino segments.
	The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the 2012 Annual Report on Form 10-K.
	Depreciation, interest expense and income taxes are allocated to the segments but no allocation is made to concessions for shared facilities. However, the concessions segment pays approximately 25% of gross revenues earned on live racing and special event days to the horse racing segment for use of the facilities.

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The following tables provide information about the Company’s operating segments (in 000’s):

	Six Months Ended June 30, 2013
	Horse Racing			Card Casino		Concessions		Total
Net revenues from external customers	$	6,759		$	12,880	$	2,787	$	22,426
Intersegment revenues		249			—		745		994
Net interest income		2			—		—		2
Depreciation		554			270		69		893
Segment (loss) income before income taxes		(1,080	)		2,291		83		1,294
	At June 30, 2013
Segment Assets	$	36,637		$	1,896	$	13,083	$	51,616

	Six Months Ended June 30, 2012
	Horse Racing			Card Casino		Concessions		Total
Net revenues from external customers	$	6,246		$	12,593	$	2,734	$	21,573
Intersegment revenues		249			—		733		982
Net interest income		3			—		—		3
Depreciation		526			294		65		885
Segment (loss) income before income taxes		(1,130	)		2,003		331		1,204
	At December 31, 2012
Segment Assets	$	31,950		$	2,337	$	12,538	$	46,825

The following are reconciliations of reportable segment revenue, income before income taxes, and assets, to the Company’s consolidated totals (in 000’s):

	Six Months Ended June 30,
	2013			2012
Revenues
Total net revenue for reportable segments	$	23,420		$	22,555
Elimination of intersegment revenues		(994	)		(982	)
Total consolidated net revenues	$	22,426		$	21,573

Income before income taxes
Total segment income before income taxes	$	1,294		$	1,204
Elimination of intersegment income before income taxes		(454	)		(489	)
Total consolidated income before income taxes	$	840		$	715

	June 30, 2013			December 31, 2012
Assets
Total assets for reportable segments	$	51,616		$	46,825
Elimination of intercompany receivables		(12,484	)		(11,925	)
Total consolidated assets	$	39,132		$	34,900

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6.	COMMITMENTS AND CONTINGENCIES
	In accordance with an Earn Out Note, given to the prior owner of the Racetrack as part of the consideration paid by the Company to acquire the Racetrack in 1994, if (i) off-track betting becomes legally permissible in the State of Minnesota and (ii) the Company begins to conduct off-track betting with respect to or in connection with its operations, the Company will be required to pay to the IMR Fund, L.P. the greater of $700,000 per operating year, as defined, or 20% of the net pretax profit, as defined for each of five operating years. At this time, management believes that the likelihood that these two conditions will be met and that the Company will be required to pay these amounts is remote. At the date (if any) that these two conditions are met, the five minimum payments will be discounted back to their present value and the sum of those discounted payments will be capitalized as part of the purchase price in accordance with generally accepted accounting principles. The purchase price will be further increased if payments become due under the “20% of Net Pretax Profit” calculation. The first payment is to be made 90 days after the end of the third operating year in which off-track betting is conducted by the Company. Remaining payments would be made within 90 days of the end of each of the next four operating years.
	Additionally, the Company entered into a Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Community which became effective on June 15, 2012. The CMA contains certain covenants which, if breached, would trigger an obligation to repay a specified amount related to such covenant. At this time, management believes that the likelihood that the breach of a covenant will occur and that the Company will be required to pay the specified amount related to such covenant is remote.
	During the first and second quarter of 2013, the Company entered into multiple agreements with various vendors to both construct and put into service improved digital signage and customer relationship management software at the Racetrack in 2013. The cost of these enhancements was approximately $2,225,000. The Company anticipates that some of these expenses will be paid for using a portion of the marketing payments received from the SMSC (these payments are described in greater detail in Note 7 “Cooperative Marketing Agreement”). The Company has an agreement in principle that a portion of the marketing payments received annually will be applied to capital expenditures supporting the purposes of the CMA. The Company believes that unrestricted funds available in its cash accounts, funds generated from operations, and portions of marketing payments received from the SMSC will be sufficient to satisfy these obligations.
	The Company periodically is subject to claims or involved in legal proceedings arising in the normal course of business. At June 30, 2013, management believes that the resolution of any pending claims or legal proceedings will not have a material impact on the consolidated financial statements.
7.	COOPERATIVE MARKETING AGREEMENT
	On June 4, 2012, the Company entered into a Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Community (“SMSC”). The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s horse industry. Under the terms of the CMA, the SMSC paid the horsemen $2.7 million in June of 2012 for purse enhancements in 2012 and $5.3 million in February of 2013 to be used for purse enhancements. After 2013, the SMSC plans to contribute the additional amounts listed below.
	In addition, the Company and the SMSC have also agreed in the CMA to partner in joint marketing efforts for their mutual benefit, including signage, joint promotions, player benefits, cooperative poker tournaments, and events. Under the CMA, the SMSC paid the Company $300,000 in June of 2012 marketing purposes and $600,000 in February of 2013, and, after 2013, will pay the additional amounts listed below.

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After 2013, the SMSC has agreed to make the following purse enhancement and marketing payments in the years 2014 through 2022:

Year	Horsemen Purse Enhancement	Canterbury Park Marketing Payment
2014	5,840,000	660,000
2015	6,434,000	726,000
2016	7,087,400	798,600
2017	7,806,140	878,460
2018	8,000,000	900,000
2019	8,000,000	900,000
2020	8,000,000	900,000
2021	8,000,000	900,000
2022	8,000,000	900,000

The Company will not have any financial interest in any part of any purse enhancement payment. Therefore, purse enhancement payments will have no impact on the Company’s financial statements.

The amounts earned from the marketing payments will be recorded as a component of other revenue and the related expenses will be recorded as a component of marketing and advertising expense in the Company’s financial statements. For the six months ended June 30, 2013, the Company recorded $164,572 in revenues and incurred $164,572 in expenses related to the marketing payment. The excess of amounts received over revenues is reflected as deferred revenue which is included in accounts payable on the consolidated balance sheet.

As part of the CMA, and pursuant to a Stock Appreciation Rights Agreement (the “SAR Agreement”) dated June 14, 2012, the Company issued stock appreciation rights to the SMSC. The SAR Agreement granted rights to the SMSC to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties. Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30. Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013. The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price. The SAR Agreement and all rights granted expire on December 31, 2022. The liability related to these stock appreciation rights is recorded as a long-term liability and the Company recognizes the income or expense related to the fluctuation in the value of the stock appreciation rights against the revenues recorded relating to the marketing payment due to the nature of the agreement. Any excess expenses will be recognized as a component of other operating expenses. For the six months ended June 30, 2013, the Company recognized $108,254 of expense related to these stock appreciation rights, of which $108,254 was recorded as an offset to revenue. In the future, changes in the fair value of these stock appreciation rights will increase or decrease the stock appreciation rights liability, and the Company will recognize an additional offset to revenue or other operating expense related to these changes.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Canterbury Park Holding Corporation, our operations and our present business environment. This MD&A is provided as a supplement to – and should be read in conjunction with – our condensed consolidated financial statements and the accompanying notes to the financial statements (the “Notes”).

Overview:

          Canterbury Park Holding Corporation (the “Company”) owns and operates the Canterbury Park Racetrack and Card Casino in Shakopee, Minnesota (the “Racetrack”). The primary businesses of the Company are simulcast and live pari-mutuel horse racing, hosting unbanked card games, and food and beverage operations.

          The Racetrack is the only facility in the State of Minnesota that offers live pari-mutuel thoroughbred and quarter horse racing facility. The Racetrack earns revenues from pari-mutuel take-out on races simulcast year-round to Canterbury Park from racetracks throughout the country and from live race meets featuring thoroughbred and quarter horse racing. Live race meets commence in the month of May and conclude in September. During the live race meet, the Company televises its races to out-of-state racetracks around the country, and earns additional pari-mutuel revenue on wagers placed on its races at the out-of-state racetracks.

          The Card Casino at Canterbury Park currently hosts “unbanked” card games in which players compete against each other and not against the house, although 2012 changes to the law governing Card Casino operations authorize the Company to offer banked games in the future should it so choose. The Card Casino is open twenty-four hours a day, seven days a week. Under Minnesota law, the Company is required to pay up to 14% of gross Card Casino revenues to the Racetrack’s purse fund and the State of Minnesota Breeders’ Fund.

          The Company also generates significant revenues from other activities such as food and beverage service, parking and admission fees, the sale of programs and other racing publications, and corporate sponsorships. Additional revenues are derived from the use of the Racetrack facilities for special events, such as concerts and craft shows.

Operations Review for the Three and Six Months Ended June 30, 2013 and June 30, 2012:

          EBITDA represents earnings before interest income, income tax expense, and depreciation and amortization. EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles (“GAAP”), and should not be considered an alternative to, or more meaningful than, net income as an indicator of our operating performance or cash flows from operating activities as a measure of liquidity. EBITDA has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry. Moreover, other companies that provide EBITDA information may calculate EBITDA differently than we do.

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          The following table sets forth a reconciliation of net income, a GAAP financial measure, to EBITDA (defined below), which is a non-GAAP measure, for the six month periods ended June 30, 2013 and 2012:

     Summary of EBITDA Data:

	Six Months Ended June 30,
	2013			2012
Net income	$	484,329		$	365,968
Interest income		(1,672	)		(3,339	)
Income tax expense		355,295			348,980
Depreciation		893,280			884,580
EBITDA	$	1,731,232		$	1,596,189

          EBITDA as a percentage of net revenues was 7.7% for the first six months ended June 30, 2013, slightly better than 7.4% for the first six months ended June 30, 2012.

          Total net revenues increased $852,724, or 4.0%, during the six months ended June 30, 2013 compared to the six months ended June 30, 2012 and increased $1,316,866, or 11.0%, for the three months ended June 30, 2013 compared to the three months ended June 30, 2012. The six month improvement was due to increases in pari-mutuel, Card Casino, and concessions revenue of 8.2%, 2.3%, and 1.8%, respectively, when compared to the same period in the prior year. The three month increase represented an increase in pari-mutuel revenues of 19.3%, an increase in Card Casino revenues of 8.0%, and an increase in concessions revenue of 7.5% for the three months ended June 30, 2013 compared to the same period in 2012. See below for a further discussion of revenue.

     Summary of Pari-mutuel Data:

	Six Months Ended June 30,
	2013		2012
Racing Days
Simulcast racing days		156		158
Live and Simulcast racing days		25		24
Total Number of Racing Days		181		182
On-Track Handle
Simulcast racing handle on simulcast only days	$	13,571,000	$	13,853,000
Live and Simulcast days:
Live racing handle		4,610,000		4,279,000
Simulcast racing handle		4,024,000		3,894,000
Total On-Track Handle		22,205,000		22,026,000
Out-of-State Live Handle		7,106,000		5,197,000
Total Handle	$	29,311,000	$	27,223,000
On-Track Average Daily Handle
Simulcast only racing days	$	86,994	$	87,677
Live and simulcast racing days	$	345,360	$	340,542

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          Pari-mutuel revenue increased $397,369, or 8.2%, in the six-month period ended June 30, 2013 compared to the same period in 2012, and increased $596,242, or 19.3%, for the three-month period ended June 30, 2013 compared to the same period in 2012. Total handle wagered for the first half of 2013 was up $2,088,000, or 7.7%, compared to the same period last year. Both the six and three-month increases are primarily attributable to the change in accounting estimate that was made in the second quarter of 2013 regarding the Company’s unredeemed pari-mutuel tickets. During the quarter ended June 30, 2013, the Company reevaluated the likelihood of redemption relating to outstanding vouchers and through this assessment, the Company decreased the projected redemption rate. For the six and three months ended June 30, 2013, the change in accounting estimate decreased our liability for outstanding pari-mutuel vouchers and increased Pari-mutuel revenue in our Condensed Consolidated Statements of Operations for the periods by approximately $412,286 (pre-tax difference), increasing Income From Operations by this amount as well. Net Income increased approximately $239,150 (after taking income taxes into account), or by approximately $0.06 earnings per basic and diluted common share. Handle and pari-mutuel revenue increases are also attributable to one additional day of live racing being conducted in the first six months of 2013 compared to 2012 and to purse supplements provided under the Cooperative Marketing Agreement described below which enable the Company to offer higher quality racing and larger fields that create excellent wagering opportunities for our local race fans as well as handicappers around the country.

     Summary of Card Casino Data:

	Six Months Ended June 30,
	2013		2012
Poker Games	$	4,928,000	$	5,205,000
Table Games		6,618,000		6,164,000
Total Collection Revenue		11,546,000		11,369,000
Other Revenue		1,334,000		1,224,000
Total Card Casino Revenue	$	12,880,000	$	12,593,000
Number of Days Offered		181		182
Average Revenue per Day	$	71,160	$	69,192

          Total Card Casino revenue increased $286,566, or 2.3%, for the first six months of 2013 and also increased $486,356, or 8.0%, for the second quarter of 2013 compared to the same periods in 2012. The primary source of Card Casino revenue is a percentage of the wagers received from the players as compensation for providing the Card Casino facility and services, referred to as the “collection revenue.” Other revenue includes fees collected for the administration of tournaments, and amounts earned as reimbursement of the administrative costs of maintaining jackpot funds. Poker collection revenue during the first six months of 2013 decreased $277,212, or 5.3%, and also slightly decreased $13,373, or 0.6% for the second quarter of 2013 compared to the same periods in 2012. The Company believes that the six month year-over-year decrease in poker revenues is attributable to inclement weather in Minnesota during the first quarter of 2013 compared to unusually mild weather experienced during the first quarter of 2012. Table games collection revenue increased $453,556, or 7.4%, compared to the first half of 2012 and $419,615, or 13.7%, for the quarter ended June 30 compared to the same period in 2012. The Company believes this increase was primarily due to increased tables being offered as the result of favorable legislation enacted into law in May 2012. This is described in greater detail in Legislation below. Total Card Casino revenues represented 57.4% and 49.2% of net revenues for the six-month and three-month periods ended June 30, 2013, respectively. The second quarter percentage is usually lower in every calendar year due to substantially increased revenue from live racing.

          Concessions revenue remained relatively flat for the six-month period ended June 30, 2013 when compared to the same period in 2012, increasing $50,126, or 1.8%. However, concessions revenue increased $135,494, or 7.5%, for the quarter ended June 30, 2013 compared to the same quarter in 2012. The increase primarily reflects an additional day of live racing being conducted in the second quarter of 2013 compared to 2012 and is consistent with increased attendance through June 30 at the 2013 live meet and in the Card Casino. Also, the Company experienced higher special event attendance in 2013 that drove more concessions sales.

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          Total operating expenses increased $726,381, or 3.5%, and $691,192, or 5.6%, for the six-month and three-month periods ended June 30, 2013, respectively, compared to the same periods in the prior year. See below for a further discussion of operating expenses.

     Summary of Purse and Breeders’ Fund Expense:

					Minnesota
	Purse Expense				Breeders’ Fund Expense
	Six Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Card Casino	$	1,407,000	$	1,371,000	$	156,000	$	152,000
Simulcast Horse Racing		951,000		951,000		197,000		200,000
Live Horse Racing		482,000		429,000		46,000		43,000
	$	2,840,000	$	2,751,000	$	399,000	$	395,000

          Due to the increases in pari-mutuel and Card Casino revenues, total expense for statutory purses and the Minnesota Breeders’ Fund increased $94,090, or 3.0%, and $162,304, or 7.4%, for the six and three month periods ended June 30, 2013 compared to same periods in 2012. Both purse and Breeders’ Fund expenses are determined by wagering levels on our Card Casino and live and simulcast racing.

          Salaries and benefits increased $494,872, or 5.3%, in the 2013 six-month period ended June 30, 2013 and $273,457, or 5.3%, in the three-month period ended June 30, 2013 compared to the same periods last year. The increases are partially due to supporting the increased revenue from all revenue categories during the three and six-month periods ending June 30, 2013 compared to the same periods in 2012. Additionally, there were increased salary and benefit costs as compared to the first six months of last year due to annual increases in salaries and wages.

          Utilities increased $77,276, or 15.4%, in the 2013 six-month period ended June 30, 2013 and $37,747, or 13.7%, in the three-month period ended June 30, 2013 compared to the same periods last year. The increases are primarily attributable to rising utility rates and increased utilities expense during the first quarter of 2013 due to inclement weather during the first quarter of 2013 as compared to the unusually mild weather in the first quarter of 2012.

          Advertising and marketing costs increased $187,523, or 27.6%, in the six-month period ended June 30, 2013 and $202,012, or 41.7%, in the three-month period ended June 30, 2013 compared to the same periods last year. These increases are primarily as a result of increased radio and billboard expenditures promoting the Card Casino and Racetrack and increased expenses related to the Cooperative Marketing Agreement described in greater detail below.

          Other operating expenses decreased $191,031, or 4.8%, in the six-month period ended June 30, 2013 and $104,047, or 4.3%, in the three-month period ended June 30, 2013 compared to the same periods last year. The decreases are primarily due to reduced professional fees in 2013 as compared to 2012 that were related to the creation and signing of the Cooperative Marketing Agreement entered into with the Shakopee Mdewakanton Sioux Community.

          Income before income taxes was $839,624 for the six months ended June 30, 2013 compared to $714,948 for the six months ended June 30, 2012. After income tax expense of $355,295 for the six months ended June 30, 2013, the Company reported net income of $484,329 in 2013 compared to net income of $365,968 in 2012. For the quarter ended June 30, 2013, the Company recorded income before income tax expense of $332,895 compared to a loss before income tax benefit of $291,125 for the quarter ended June 30, 2012. After income tax expense of $139,647, net income in the second quarter of 2013 was $193,248 compared to a net loss of $166,536 for the second quarter of 2012. The significant level of income taxes estimated for the second quarter and six-month periods ending June 30, 2012 is primarily due to the non-deductibility of lobbying expenses incurred by the Company.

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Contingencies:

          As discussed below under “Cooperative Marketing Agreement”, on June 4, 2012, the Company entered into the CMA with the Shakopee Mdewakanton Sioux Community that became effective on June 15, 2012. The CMA contains certain covenants which, if breached, would trigger an obligation to repay a specified amount related to such covenant. At this time, management believes that the likelihood that the breach of a covenant in the CMA will occur and that the Company will be required to pay the specified amount related to such covenant is remote.

Liquidity and Capital Resources:

          Cash provided by operating activities for the six months ended June 30, 2013 was $1,660,494 and was due to several factors. First, the Company reported net income of $484,329. Additionally, the Company recorded depreciation of $893,280. The Company also experienced an increase in accounts payable and accrued wages and payroll taxes of $3,752,147, caused primarily by a seasonal increase of $2,488,500 in horsemen payables. These items were somewhat offset by an increase in other current assets of $734,543, an increase in income taxes receivable of $549,105, and an increase in restricted cash of $1,811,069 (resulting primarily from the increase in horsemen payables of $2,488,500). Cash provided by operating activities for the six months ended June 30, 2012 was $1,765,502 and was due to several factors. First, the Company reported net income of $365,968. Additionally, the Company recorded depreciation of $884,580. The Company also experienced an increase in accounts payable and accrued wages and payroll taxes of $2,899,089, caused primarily by a seasonal increase of $1,425,126 in horsemen payables. These items were somewhat offset by an increase in other current assets of $389,749 and an increase in restricted cash of $1,369,351, resulting primarily from the increase in horsemen payables of $1,425,126.

          Net cash used in investing activities for the first six months of 2013 was $3,391,328 and was used primarily for the purchase of technology upgrades and enhancements, including digital signage and customer relationship management equipment, and building improvements. Net cash used in investing activities for the first six months of 2012 was $754,510 and was used primarily for a variety of equipment purchases.

          Net cash provided by financing activities during the first six months of 2013 was $27,285, and consisted of proceeds received upon the issuance of common stock relating to ESPP and stock option purchases of $39,113, slightly offset by common stock repurchases of $7,509 and tax expense from the exercise of stock options and issuance of restricted stock. During the period January 1, 2012 through June 30, 2012, cash provided by financing activities consisted of proceeds and excess tax benefits received upon the exercise of stock options of $210,300.

          The Company has a general credit agreement with Bremer Bank, which provides a revolving credit line of up to $3,000,000 until May 5, 2014 with interest at the prime rate but not less than 4.5% per annum. The Company had no borrowings under the line of credit at June 30, 2013 or December 31, 2012. This credit agreement contains covenants requiring the Company to maintain certain financial ratios. The Company was in compliance with these requirements at all times throughout the quarter ended June 30, 2013.

          The Company’s cash and cash equivalent balance at June 30, 2013 was $7,681,434 compared to $9,384,983 at December 31, 2012. The Company believes that funds available in its cash accounts, amounts available under the general credit and security agreement, along with funds generated from operations, will be sufficient to satisfy its liquidity and capital resource requirements for regular operations during 2013.

Critical Accounting Policies and Estimates:

          The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time the consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with generally accepted accounting principles. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

21

          Our significant accounting policies are included in Note 1 to our consolidated financial statements in our 2012 Annual Report on Form 10-K. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

          Property and Equipment - We have significant capital invested in our property and equipment, which represents approximately 63.1% of our total assets at June 30, 2013. We utilize our judgment in various ways including: determining whether an expenditure is considered a maintenance expense or a capital asset; determining the estimated useful lives of assets; and determining if or when an asset has been impaired or has been disposed. Management periodically reviews the carrying value of property and equipment for potential impairment by comparing the carrying value of these assets with their related undiscounted expected future net cash flows. If the sum of the related expected future net cash flows is less than the carrying value, we will determine whether an impairment loss should be recognized. An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. To date, we have determined that no impairment of these assets exists.

          Stock Based Compensation – ASC 718, Compensation – Stock Compensation (“ASC 718”), requires recognition of services provided in exchange for a share-based payment based on the grant date fair market value. We utilize our judgment in determining the assumptions used to determine the fair value of equity instruments granted using a Black-Scholes model.

Commitments and Contractual Obligations:

          On June 4, 2012, the Company entered into a Cooperative Marketing Agreement with the Shakopee Mdewakanton Sioux Community that expires December 31, 2022. See “Cooperative Marketing Agreement” below.

Legislation:

          In May 2012, the Minnesota law governing the Card Casino was amended in several respects, which increased the Company’s flexibility to operate its Card Casino, thereby creating opportunities to earn increased revenues and pay increased purses for live races at Canterbury Park’s Racetrack.

          Under the amended law, the Company can conduct card play on up to 80 tables in its Card Casino. It also increased the poker betting limit from $60 to $100. The amended law also removed limits on the number of poker tournaments the Company can conduct, as well as limits on the number of tables used in poker tournaments and allows Canterbury to conduct “banked” card games, in which customers play against the house, along with the unbanked games it currently conducts. In a separate provision, the amended law established a framework for the possible implementation of pari-mutuel simulcasting of horse races conducted at Canterbury and other racetracks to Tribal casinos in Minnesota.

          The amended law is being implemented in stages. The Company has increased the number of tables hosting live play from 50 to approximately 66 to accommodate customers during peak periods, has offered higher betting limits to accommodate demand, and has expanded poker tournaments as well. Additional changes will be implemented based on market demand.

Cooperative Marketing Agreement:

          On June 4, 2012, the Company entered into a Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Community (“SMSC”). The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s horse industry. Under the terms of the CMA, the SMSC paid the horsemen $2.7 million in June of 2012 for purse enhancements in 2012 and $5.3 million in February of 2013 to be used for purse enhancements. After 2013, the SMSC plans to contribute the additional amounts listed below.

22

          In addition, the Company and the SMSC have also agreed in the CMA to partner in joint marketing efforts for their mutual benefit, including signage, joint promotions, player benefits, cooperative poker tournaments, and events. Under the CMA, the SMSC paid the Company $300,000 in June of 2012 for marketing purposes and $600,000 in February of 2013, and, after 2013, will pay the additional amounts listed below.

After 2013, the SMSC has agreed to make the following purse enhancement and marketing payments in the years 2014 through 2022:

Year	Horsemen Purse Enhancement	Canterbury Park Marketing Payment
2014	5,840,000	660,000
2015	6,434,000	726,000
2016	7,087,400	798,600
2017	7,806,140	878,460
2018	8,000,000	900,000
2019	8,000,000	900,000
2020	8,000,000	900,000
2021	8,000,000	900,000
2022	8,000,000	900,000

          The Company will not have any financial interest in any part of any purse enhancement payment. Therefore, purse enhancement payments will have no impact on the Company’s financial statements.

          The amounts earned from the marketing payments will be recorded as a component of other revenue and the related expenses will be recorded as a component of marketing and advertising expense in the Company’s financial statements. For the six months ended June 30, 2013, the Company recorded $164,572 in revenues and incurred $164,572 in expenses related to the marketing payment. The excess of amounts received over revenues is reflected as deferred revenue which is included in accounts payable on the consolidated balance sheet.

          As part of the CMA, and pursuant to a Stock Appreciation Rights Agreement (the “SAR Agreement”) dated June 14, 2012, the Company issued stock appreciation rights to the SMSC. The SAR Agreement granted rights to the SMSC to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties. Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30. Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013. The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price. The SAR Agreement and all rights granted expire on December 31, 2022. The liability related to these stock appreciation rights is recorded as a long-term liability and the Company recognizes the income or expense related to the fluctuation in the value of the stock appreciation rights against the revenues recorded relating to the marketing payment due to the nature of the agreement. Any excess expenses will be recognized as a component of other operating expenses. For the six months ended June 30, 2013, the Company recognized $108,254 of expense related to these stock appreciation rights, of which $108,254 was recorded as an offset to revenue. In the future, changes in the fair value of these stock appreciation rights will increase or decrease the stock appreciation rights liability, and the Company will recognize an additional offset to revenue or other operating expense related to these changes.

23

Forward-Looking Statements:

          From time to time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, the Company may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans which are typically preceded by the words “believes,” “expects,” “anticipates,” “intends” or similar expressions. For such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in federal securities laws. Shareholders and the investing public should understand that such forward-looking statements are subject to risks and uncertainties which could cause actual performance, activities or plans to differ significantly from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to: fluctuations in attendance at the Racetrack, material changes in the level of wagering by patrons, decline in interest in the card games offered in the Card Casino, legislative and regulatory changes, the impact of wagering products and technologies introduced by competitors; increases in the percentage of revenues allocated for purse fund payments; increase in compensation and employee benefit costs; the economic health of the gaming sector; higher than expected expense related to new marketing initiatives; and other factors discussed under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2012 and in the Company’s other filings with the Securities and Exchange Commission.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Canterbury Park is not required to provide the information requested by this Item as it qualifies as a smaller reporting company.

ITEM 4: CONTROLS AND PROCEDURES

(a)	Evaluation of Disclosure Controls and Procedures:
	The Company’s Chief Executive Officer, Randall D. Sampson, and Chief Financial Officer, David C. Hansen, have reviewed the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based upon this review, these officers have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that the disclosure controls are also effective to ensure that information required to be disclosed in the Company’s Exchange Act reports is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.
(b)	Changes in Internal Control Over Financial Reporting:
	There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934) that occurred during our fiscal quarter ended June 30, 2013 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

24

PART II 
OTHER INFORMATION

Item 1.	Legal Proceedings
	Not Applicable.
Item 1A.	Risk Factors
	There have been no material changes to the Risk Factors reported under Item 1A in the Form 10-K for the year ended December 31, 2012, and the statement of risk factors presented therein are incorporated by reference herein.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	(a)	Not Applicable.
	(b)	Not Applicable.
	(c)	On December 17, 2007, the Company’s Board of Directors adopted a plan that authorized the repurchase of up to 250,000 shares of the Company’s common stock pursuant to Exchange Act Rule 12b-18 in open market transactions, block purchases of privately negotiated transactions (the “2008 Stock Repurchase Plan”). From its adoption until August 13, 2012, the Company repurchased 216,543 shares under the 2008 Stock Repurchase Plan and, on such date, authorized the repurchase of an additional 100,000 shares of the Company’s common stock. During the first quarter of 2013, the Company repurchased and retired 809 shares at an average price of $9.28 per share for a total cost of $7,509. The Company did not repurchase any shares during the second quarter of 2013.
		A month-by-month breakdown of purchases in included in the following table:

Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plan		(d) Maximum Number of Shares that May Yet Be Purchased Under the Plan
Jan. 1 to Jan. 31, 2013		809	$	9.28		59,357		128,781
Feb. 1 to Feb. 28, 2013		—		—		—		128,781
Mar. 1 to Mar. 31, 2013		—		—		—		128,781
Apr. 1 to Apr. 30, 2013		—		—		—		128,781
May 1 to May 30, 2013		—		—		—		128,781
Jun. 1 to Jun. 30, 2013		—		—		—		128,781
Total		809				59,357		128,781

Item 3.	Defaults Upon Senior Securities
	Not Applicable.
Item 4.	Mine Safety Disclosures
	Not Applicable.
Item 5.	Other Information
	Future shareholder advisory votes on executive compensation. The agenda of the Company’s Annual Meeting of Shareholders held on May 30, 2013 (the 2013 Shareholders Meeting) included a nonbinding shareholder advisory vote regarding the frequency of future advisory votes on executive compensation. In the Company’s Proxy Statement for the 2013 Shareholders Meeting its Board of Directors recommended shareholders vote in favor of holding this advisory vote every three years. As disclosed in the Company’s Current Report on Form 8-K dated May 30, 2013, holders of approximately 88.7% of the Company’s shares that indicated a preference voted their shares at the 2013 Shareholders Meeting in favor of holding the advisory vote on executive compensation every three years. Given the preference of most shareholders voting on this question and consistent with its recommendation to shareholders, the directors at their August 12, 2013 meeting approved conducting a shareholder advisory vote on executive compensation every three years. Accordingly, the next shareholder advisory vote on executive compensation is expected to be held at the annual meeting of the Company’s shareholders in 2016.

25

Item 6.	Exhibits
	(a)	The following exhibits are included herein:
		11	Statement re computation of per share earnings – See Net Income Per Share under Note 1 of Notes to Consolidated Financial Statements under Part 1, Item 1, which is incorporated herein by reference.
		31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (rules 13a-14 and 15d-14 of the Exchange Act).
		31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (rules 13a-14 and 15d-14 of the Exchange Act).
		32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

26

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

	Canterbury Park Holding Corporation
Dated: August 14, 2013	/s/ Randall D. Sampson
	Randall D. Sampson,
	President, and Chief Executive Officer
Dated: August 14, 2013	/s/ David C. Hansen
	David C. Hansen,
	Vice President, and Chief Financial Officer

27

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Randall D. Sampson certify that:
	1.	I have reviewed this quarterly report on Form 10-Q of Canterbury Park Holding Corporation;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:
			a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
			b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
			c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
			d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case on an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;
	5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
			a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
			b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 14, 2013	CANTERBURY PARK HOLDING CORPORATION
	/s/ Randall D. Sampson
	Randall D. Sampson
	President, and Chief Executive Officer

28

EX-31.2

Exhibit 31.2 

CERTIFICATION

I, David C. Hansen certify that:
	1.	I have reviewed this quarterly report on Form 10-Q of Canterbury Park Holding Corporation;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
			a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
			b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
			c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
			d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;
	5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
			a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
			b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 14, 2013	CANTERBURY PARK HOLDING CORPORATION
	/s/ David C. Hansen
	David C. Hansen
	Vice President, and Chief Financial Officer

29

EX-32

Exhibit 32

CERTIFICATION

          Pursuant to18 U.S.C. 1350, the undersigned Chief Executive Officer and Chief Financial Officer, respectively, of Canterbury Park Holding Corporation (the “Company”) herby certify that: 

(1)	The accompanying quarterly report on Form 10-Q for the period June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the accompanying Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	CANTERBURY PARK HOLDING CORPORATION
Dated: August 14, 2013	/s/ Randall D. Sampson
	Randall D. Sampson,
	President, and Chief Executive Officer
Dated: August 14, 2013	/s/ David C. Hansen
	David C. Hansen,
	Vice President, and Chief Financial Officer

30

XML

Cooperative Marketing Agreement (Tables)

6 Months Ended

Jun. 30, 2013

Cooperative Marketing Agreement [Abstract]

Purse Enhancement And Marketing Payments

Year	Horsemen Purse Enhancement	Canterbury Park Marketing Payment
2014	5,840,000	660,000
2015	6,434,000	726,000
2016	7,087,400	798,600
2017	7,806,140	878,460
2018	8,000,000	900,000
2019	8,000,000	900,000
2020	8,000,000	900,000
2021	8,000,000	900,000
2022	8,000,000	900,000

XML

Condensed Consolidated Statements Of Operations (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
OPERATING REVENUES:
Pari-mutuel	$ 3,691,728	$ 3,095,486	$ 5,268,686	$ 4,871,317
Card Casino	6,536,394	6,050,038	12,879,677	12,593,111
Concessions	1,931,573	1,796,079	2,778,999	2,728,873
Other	1,186,154	1,075,935	1,597,046	1,473,431
Total Revenues	13,345,849	12,017,538	22,524,408	21,666,732
Less: Promotional Allowances	(64,899)	(53,454)	(98,890)	(93,938)
Net Revenues	13,280,950	11,964,084	22,425,518	21,572,794
OPERATING EXPENSES:
Purse expense	1,975,348	1,829,069	2,840,461	2,750,800
Minnesota Breeders' Fund	250,744	234,719	399,077	394,648
Other pari-mutuel expenses	515,415	468,686	844,350	821,510
Salaries and benefits	5,447,531	5,174,074	9,856,521	9,361,649
Cost of sales	1,029,947	985,897	1,554,813	1,520,941
Depreciation	446,640	411,000	893,280	884,580
Utilities	313,876	276,129	580,206	502,939
Advertising and marketing	686,482	484,470	867,805	680,282
Gain on disposal of assets	(6,700)		(1,752)
Other operating expenses	2,289,343	2,393,390	3,752,805	3,943,836
Total Operating Expenses	12,948,626	12,257,434	21,587,566	20,861,185
INCOME (LOSS) FROM OPERATIONS	332,324	(293,350)	837,952	711,609
NONOPERATING REVENUES:
Interest income	571	2,225	1,672	3,339
Net Other Income	571	2,225	1,672	3,339
INCOME (LOSS) BEFORE INCOME TAXES	332,895	(291,125)	839,624	714,948
INCOME TAX (EXPENSE) BENEFIT	(139,647)	124,589	(355,295)	(348,980)
NET INCOME (LOSS)	$ 193,248	$ (166,536)	$ 484,329	$ 365,968
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING	4,157,305	4,115,771	4,153,819	4,113,901
WEIGHTED AVERAGE NUMBER OF DILUTIVE SHARES OUTSTANDING	4,182,727	4,115,771	4,173,620	4,162,094
BASIC NET INCOME (LOSS) PER COMMON SHARE	$ 0.05	$ (0.04)	$ 0.12	$ 0.09
DILUTED NET INCOME (LOSS) PER COMMON SHARE	$ 0.05	$ (0.04)	$ 0.12	$ 0.09

XML

Operating Segments

6 Months Ended

Jun. 30, 2013

Operating Segments [Abstract]

Operating Segments

5.   OPERATING SEGMENTS

The Company hasthree reportable operating segments:  horse racing, Card Casino, and concessions.  The horse racing segment primarily represents simulcast and live horse racing operations and the operation of an RV park.  The Card Casino segment represents operations of Canterbury Park’s Card Casino, and the concessions segment represents food and beverage operations provided during simulcast and live racing, in the Card Casino, and during special events.  The Company’s reportable operating segments are strategic business units that offer different products and services.  They are managed separately because the segments differ in the nature of the products and services provided as well as processes to produce those products and services.  The Minnesota Racing Commission regulates the horse racing and Card Casino segments.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the 2012 Annual Report on Form 10-K.

Depreciation, interest expense and income taxes are allocated to the segments but no allocation is made to concessions for shared facilities.  However, the concessions segment pays approximately 25% of gross revenues earned on live racing and special event days to the horse racing segment for use of the facilities. 

The following tables provide information about the Company’s operating segments (in 000’s):

	Six Months Ended June 30, 2013
	Horse Racing			Card Casino			Concessions			Total
Net revenues from external customers		$	6,759		$	12,880		$	2,787		$	22,426
Intersegment revenues			249			-			745			994
Net interest income			2			-			-			2
Depreciation			554			270			69			893
Segment (loss) income before income taxes			(1,080)			2,291			83			1,294
		At June 30, 2013
Segment Assets		$	36,637		$	1,896		$	13,083		$	51,616

	Six Months Ended June 30, 2012
	Horse Racing			Card Casino			Concessions			Total
Net revenues from external customers		$	6,246		$	12,593		$	2,734		$	21,573
Intersegment revenues			249			-			733			982
Net interest income			3			-			-			3
Depreciation			526			294			65			885
Segment (loss) income before income taxes			(1,130)			2,003			331			1,204
		At December 31, 2012
Segment Assets		$	31,950		$	2,337		$	12,538		$	46,825

The following are reconciliations of reportable segment revenue, income before income taxes, and assets, to the Company’s consolidated totals (in 000’s):

	Six Months Ended June 30,
	2013		2012
Revenues
Total net revenue for reportable segments	$	23,420	$	22,555
Elimination of intersegment revenues		(994)		(982)
Total consolidated net revenues	$	22,426	$	21,573

Income before income taxes
Total segment income before income taxes	$	1,294	$	1,204
Elimination of intersegment income before income taxes		(454)		(489)
Total consolidated income before income taxes	$	840	$	715

	June 30,		December 31,
	2013		2012
Assets
Total assets for reportable segments	$	51,616	$	46,825
Elimination of intercompany receivables		(12,484)		(11,925)
Total consolidated assets	$	39,132	$	34,900

XML

Earnings Per Share Computations (Narrative) (Details) (USD $)	Jun. 30, 2013	Jun. 30, 2012
Earnings Per Share Computations [Abstract]
Number of common stock shares to purchase under stock options	104,500	119,500
Average price of common shares under stock options	$ 14.44	$ 14.36

XML

Summary Of Significant Accounting Policies (Details) (USD $)	3 Months Ended		4 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	May 03, 2012 item	Jun. 30, 2013 mi item	Jun. 30, 2012
Summary Of Significant Accounting Policies [Line Items]
Racetrack distance from Minneapolis (in miles)				25
Casino open, number of hours daily				24 hours
Casino open, number of days weekly				7 days
Minnesota State law, maximum number of game tables			50	80
Number of largest sources of revenues				3
Amount insured by Federal Deposit Insurance Corporation	$ 250,000			$ 250,000
Pari-mutuel Revenue	3,691,728	3,095,486		5,268,686	4,871,317
Income From Operations	332,324	(293,350)		837,952	711,609
Net income	193,248	(166,536)		484,329	365,968
Due to Minnesota Horsemen's Benevolent and Protective Association, Inc.	2,925,000	2,575,000
Restatement Adjustment [Member]
Summary Of Significant Accounting Policies [Line Items]
Pari-mutuel Revenue	412,286
Income From Operations	412,286
Net income	239,150
Earnings per basic and diluted common share	$ 0.06
Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, minimum cost capitalization				$ 1,000
Minimum [Member] | Furniture, Fixtures And Equipment [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life				5 years
Minimum [Member] | Building [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life				15 years
Maximum [Member] | Furniture, Fixtures And Equipment [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life				7 years
Maximum [Member] | Building [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life				39 years

XML

Operating Segments (Narrative) (Details)	6 Months Ended
	Jun. 30, 2013 segment
Operating Segments [Abstract]
Number of reportable operating	3
Percent of gross concession segment revenue paid to horse racing segment	25.00%

XML

General Credit Agreement (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
General Credit Agreement [Abstract]
Revolving credit line maximum borrowing amount	$ 3,000,000
Borrowings under credit line	$ 0	$ 0

XML

Cooperative Marketing Agreement (Purse Enhancement And Marketing Payments) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Cooperative Marketing Agreement [Abstract]
2014, Purse Enhancement	$ 5,840,000
2015, Purse Enhancement	6,434,000
2016, Purse Enhancement	7,087,400
2017, Purse Enhancement	7,806,140
2018, Purse Enhancement	8,000,000
2019, Purse Enhancement	8,000,000
2020, Purse Enhancement	8,000,000
2021, Purse Enhancement	8,000,000
2022, Purse Enhancement	8,000,000
2014, Marketing Payment	660,000
2015, Marketing Payment	726,000
2016, Marketing Payment	798,600
2017, Marketing Payment	878,460
2018, Marketing Payment	900,000
2019, Marketing Payment	900,000
2020, Marketing Payment	900,000
2021, Marketing Payment	900,000
2022, Marketing Payment	$ 900,000

XML

Operating Segments (Reconciliation Of Assets) (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Segment Reporting, Asset Reconciling Item [Line Items]
Total consolidated assets	$ 39,132,272	$ 34,899,512
Reportable Segment [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total consolidated assets	51,616,000	46,825,000
Elimination Of Intersegment [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total consolidated assets	$ (12,484,000)	$ (11,925,000)

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Earnings Per Share Computations (Schedule Of Earnings Per Share Reconciliation) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Earnings Per Share Computations [Abstract]
Net income (loss) (numerator) amounts used for basic and diluted per share computations:	$ 193,248	$ (166,536)	$ 484,329	$ 365,968
Basic	4,157,305	4,115,771	4,153,819	4,113,901
Plus dilutive effect of stock options	25,422		19,801	48,193
Diluted	4,182,727	4,115,771	4,173,620	4,162,094
Basic	$ 0.05	$ (0.04)	$ 0.12	$ 0.09
Diluted	$ 0.05	$ (0.04)	$ 0.12	$ 0.09

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Summary Of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business – Canterbury Park Holding Corporation (the “Company”) was incorporated under the laws of Minnesota and acquired land and buildings to conduct pari-mutuel horse racing operations (the “Racetrack”) in March 1994.  The Racetrack is located in Shakopee, Minnesota, approximately 25 miles southwest of downtown Minneapolis.  In May 1994, we commenced year-round horse racing simulcast operations and hosted the first annual live race meet during the summer of 1995.  Our live racing operations are a seasonal business as we host live race meets each year from May until September.  We earn additional pari-mutuel revenue by televising our live racing to out-of-state racetracks around the country.  Canterbury Park’s Card Casino operates 24 hours a day, seven days a week and is limited by Minnesota State law to a maximum of 80 tables.  Prior to May 4, 2012, the Company was limited to a maximum of 50 tables.  The Card Casino currently offers a variety of poker and table games.  Our three largest sources of revenues, Card Casino operations, pari-mutuel operations and concessions sales, generate cash revenues.  We also derive revenues from related services and activities, such as advertising, parking and publication sales and from other entertainment events and activities held at the Racetrack. 

Revenue Recognition – Our revenues are derived primarily from the operations of a Card Casino, pari-mutuel wagering on simulcast and live horse races, concession sales, and related activities.  Collection revenue from Card Casino operations, a set percentage of wagers, is recognized at the time that the wagering process is complete.  Pari-mutuel revenues are recognized upon occurrence of the live race that is presented for wagering and after that live race is made official by the respective state’s racing regulatory body.  Revenues related to concession and publication sales and parking and admission fees are recognized as revenue when the service has been performed or the product has been delivered.  All sales taxes are presented on a net basis and are excluded from revenue.

Estimates – The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.

Cash and Cash Equivalents – Cash and cash equivalents include all investments with original maturities of three months or less or which are readily convertible into known amounts of cash and are not legally restricted.  Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Restricted Cash – Restricted cash represents refundable deposits and amounts due to horsemen for purses, stakes and awards, and amounts accumulated in card game progressive jackpot pools, the player pool and poker promotional fund to be used to repay card players in the form of promotions, giveaways, prizes, or by other means.

Short-term Investments – Securities are classified as held to maturity when the Company has the positive intent and ability to hold them to maturity, and are measured at amortized cost.  At June 30, 2013 and December 31, 2012, all investments were classified as held-to-maturity.  The Company continually reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary.  If the decline in fair value is judged to be other than temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in earnings.  Short-term investments consist of certificates of deposits at June 30, 2013 and December 31, 2012.  Amortized cost approximated fair value for both periods.

Accounts Receivable – Accounts receivable are initially recorded for amounts due from other tracks for simulcast revenue, net of amounts due to other tracks, and for amounts due from customers related to special events.  Credit is granted in the normal course of business without collateral.  Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments.  Accounts that are outstanding longer than the contractual terms are considered past due.  When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our day-to-day knowledge of specific customers.  We write off accounts receivable when they become uncollectible.  Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in other operating expenses in our consolidated statements of operations.

Inventory – Inventory consists primarily of food and beverages, small wares and supplies and retail goods and are recorded at the lower of cost (first-in, first-out) or market. 

Unredeemed Pari-mutuel Tickets – The Company records a liability for winning tickets and vouchers upon the completion of a race and when a voucher is printed, respectively.  As uncashed winning tickets and vouchers are redeemed, this liability is reduced for the respective cash payment.  We recognize revenue associated with the uncashed winning tickets and vouchers when the likelihood of redemption, based on historical experience, is remote.  While we continue to honor all winning tickets and vouchers presented for payment, management may determine the likelihood of redemption to be remote due to the length of time that has elapsed since the ticket was issued.  In these circumstances, if management also determines there is no requirement for remitting balances to government agencies under unclaimed property laws, uncashed winning tickets and vouchers may then be recognized as revenue in our Condensed Consolidated Statements of Operations.  During the quarter ended June 30, 2013, the Company reevaluated the likelihood of redemption relating to outstanding vouchers and through this assessment, the Company decreased the projected redemption rate.  The Company has determined that this adjustment to the likelihood of redemption relating to vouchers is a change in accounting estimate and has accounted for the change prospectively; i.e. the accounting change impacts interim reporting periods within fiscal year 2013 and future periods.  For the three months ended June 30, 2013, the change in accounting estimate decreased our liability for outstanding pari-mutuel vouchers and increased Pari-mutuel Revenue in our Condensed Consolidation Statements of Operations for the period by approximately $412,286 (pre-tax difference), increasing Income From Operations by this amount as well.  Net Income increased approximately $239,150 (after taking income taxes into account), or by approximately $0.06 earnings per basic and diluted common share. 

Promotional Allowances – The Company offers certain promotional allowances at no charge to patrons who participate in our player rewards program.  The retail value of these promotional items is shown as a deduction from total revenues on the Company’s consolidated statements of operations.

Due to Minnesota Horsemen’s Benevolent and Protective Association, Inc. (“MHBPA”) – The Minnesota Pari-mutuel Horse Racing Act specifies that the Company is required to segregate a portion of funds (recorded as purse expense in the statements of operations), received from Card Casino operations and wagering on simulcast and live horse races, for future payment as purses for live horse races or other uses of the horsepersons’ associations.  Pursuant to an agreement with the MHBPA, the Company transferred into a trust account or paid directly to the MHBPA, approximately $2,925,000 and $2,575,000 for the three-month periods ending June 30, 2013 and 2012, respectively related to thoroughbred races.  Minnesota Statutes specify that amounts transferred into the trust account are the property of the trust and not of the Company. 

Impairment of Long-Lived Assets – Management of the Company periodically reviews the carrying value of property and equipment for potential impairment by comparing the carrying value of these assets with their related expected undiscounted future net cash flows.  Should the sum of the related expected future net cash flows be less than the carrying value, management will determine whether an impairment loss should be recognized.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset.  Management has determined that no impairment of these assets exists at June 30, 2013.

Advertising and Marketing – Advertising and marketing costs are charged to expense as incurred.  The related amounts are presented separately in the Company’s consolidated statements of operations.

Land, Buildings, and Equipment – Land, buildings, equipment, and building improvements are capitalized at a level of $1,000 or greater and are recorded at cost.  Repair and maintenance costs are charged to operations when incurred.  Furniture, fixtures, and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 – 7 years, while buildings are depreciated over 15 – 39 years.  Building improvements are amortized using the straight-line method over the useful life of the assets. 

Card Casino Accruals – Minnesota law allows the Company to collect amounts from patrons to fund progressive jackpot pools in the Card Casino.  These amounts, along with amounts earned by the player pool, promotional pools and the outstanding chip liability, are accrued as short-term liabilities at each balance sheet date.

Income Taxes –  Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to reverse.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Interest and penalties associated with uncertain income tax positions are presented in income tax expense.  For the six months ended June 30, 2013 and 2012, we did not recognize any expense related to interest and penalties.  Additionally, we do not have any amounts accrued at June 30, 2013 for the payment of interest and penalties.

Net Income Per Share – Basic net income per common share is based on the weighted average number of common shares outstanding during each year.  Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding.  The Company’s only potential common shares outstanding are stock options.

FairValues of Financial Instruments – Due to the current classification of all financial instruments of the Company and given the short-term nature of the related account balances, carrying amounts reported in the consolidated balance sheets approximate fair value.

Stock Based Employee Compensation – The Company accounts for share based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized as expense over the requisite service period (generally the vesting period).  The estimated fair value of each option is calculated using the Black-Scholes option-pricing model.

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Earnings Per Share Computations

6 Months Ended

Jun. 30, 2013

Earnings Per Share Computations [Abstract]

Earnings Per Share Computations

3.   EARNINGS PER SHARE COMPUTATIONS

Basic net income per common share is based on the weighted average number of common shares outstanding during eachperiod.  Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding.  The Company’s potential common shares outstanding are stock options.  Options to purchase 104,500 shares of common stock at an average price of $14.44 per share were outstanding but not included in the computation of diluted earnings per share for both the three and six-month periods ending June 30, 2013 because the options were out of the money at June 30, 2013.  Options to purchase 119,500 shares of common stock at an average price of $14.36 per share were outstanding but not included in the computation of diluted earnings per share for both the three and six-month period ending June 30, 2012 because the options were out of the money at June 30, 2012.

The following is a reconciliation of the numerator and denominator of the earnings per common share computations for the three and six-month periods ending June 30, 2013 and 2012:

	Three		Three		Six		Six
	Months		Months		Months		Months
	Ended		Ended		Ended		Ended
	June 30,		June 30,		June 30,		June 30,
	2013		2012		2013		2012
Net income (loss) (numerator) amounts used for basic and diluted per share computations:	$	193,248	$	(166,536)	$	484,329	$	365,968
Weighted average shares (denominator) of common stock outstanding:
Basic		4,157,305		4,115,771		4,153,819		4,113,901
Plus dilutive effect of stock options		25,422		-		19,801		48,193
Diluted		4,182,727		4,115,771		4,173,620		4,162,094
Net income (loss) per common share:
Basic	$	.05	$	(.04)	$	.12	$	.09
Diluted		.05		(.04)		.12		.09

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Commitments And Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies [Abstract]

Commitments And Contingencies

6.   COMMITMENTS AND CONTINGENCIES

In accordance with an Earn Out Note, given to the prior owner of the Racetrack as part of the consideration paid by the Company to acquire the Racetrack in 1994, if (i) off-track betting becomes legally permissible in the State of Minnesota and (ii) the Company begins to conduct off-track betting with respect to or in connection with its operations, the Company will be required to pay to the IMR Fund, L.P. the greater of $700,000 per operating year, as defined, or 20% of the net pretax profit, as defined for each of five operating years.  At this time, management believes that the likelihood that these two conditions will be met and that the Company will be required to pay these amounts is remote.  At the date (if any) that these two conditions are met, the five minimum payments will be discounted back to their present value and the sum of those discounted payments will be capitalized as part of the purchase price in accordance with generally accepted accounting principles.  The purchase price will be further increased if payments become due under the “20% of Net Pretax Profit” calculation.  The first payment is to be made 90 days after the end of the third operating year in which off-track betting is conducted by the Company.  Remaining payments would be made within 90 days of the end of each of the next four operating years.

Additionally, the Company entered into a Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Communitywhich became effective on June 15, 2012.  The CMA contains certain covenants which, if breached, would trigger an obligation to repay a specified amount related to such covenant.At this time, management believes that the likelihood that the breach of a covenant will occur and that the Company will be required to pay the specified amount related to such covenant is remote. 

During the first and second quarter of 2013, the Company entered into multiple agreements with various vendors to both construct and put into service improved digital signage and customer relationship management software at the Racetrack in 2013.  The cost of these enhancements was approximately $2,225,000.  The Company anticipates that some of these expenses will be paid for using a portion of the marketing payments received from the SMSC (these payments are described in greater detail in Note 7 “Cooperative Marketing Agreement”).  The Company has an agreement in principle that a portion of the marketing payments received annually will be applied to capital expenditures supporting the purposes of the CMA.  The Company believes that unrestricted funds available in its cash accounts, funds generated from operations, and portions of marketing payments received from the SMSC will be sufficient to satisfy these obligations.

The Company periodically is subject to claims or involved in legal proceedings arising in the normal course of business.  At June 30, 2013, management believes that the resolution of any pending claims or legal proceedings will not have a material impact on the consolidated financial statements.

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General Credit Agreement

6 Months Ended

Jun. 30, 2013

General Credit Agreement [Abstract]

General Credit Agreement

4.  GENERAL CREDIT AGREEMENT 

The Company has a general credit agreement with Bremer Bank, which provides a revolving credit line of up to $3,000,000.  On May 6, 2013, the Company signed an amendment with Bremer Bank extending the expiration date from May 5, 2013 to May 5, 2014, while keeping previous provisions intact.  The Company had no borrowings under this credit line at June 30, 2013 and December 31, 2012.  The credit agreement contains certain covenants requiring the Company to maintain certain financial ratios.  The Company was in compliance with these requirements as of June 30, 2013.

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Operating Segments (Schedule Of The Company's Operating Segments) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting Information [Line Items]
Net revenues from external customers			$ 22,426,000	$ 21,573,000
Intersegment revenues			994,000	982,000
Net interest income			2,000	3,000
Depreciation	446,640	411,000	893,280	884,580
Segment (loss) income before income taxes			1,294,000	1,204,000
Segment Assets	51,616,000	46,825,000	51,616,000	46,825,000
Horse Racing [Member]
Segment Reporting Information [Line Items]
Net revenues from external customers			6,759,000	6,246,000
Intersegment revenues			249,000	249,000
Net interest income			2,000	3,000
Depreciation			554,000	526,000
Segment (loss) income before income taxes			(1,080,000)	(1,130,000)
Segment Assets	36,637,000	31,950,000	36,637,000	31,950,000
Card Casino [Member]
Segment Reporting Information [Line Items]
Net revenues from external customers			12,880,000	12,593,000
Depreciation			270,000	294,000
Segment (loss) income before income taxes			2,291,000	2,003,000
Segment Assets	1,896,000	2,337,000	1,896,000	2,337,000
Concessions [Member]
Segment Reporting Information [Line Items]
Net revenues from external customers			2,787,000	2,734,000
Intersegment revenues			745,000	733,000
Depreciation			69,000	65,000
Segment (loss) income before income taxes			83,000	331,000
Segment Assets	$ 13,083,000	$ 12,538,000	$ 13,083,000	$ 12,538,000

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Commitments And Contingencies (Details) (USD $)	6 Months Ended
	Jun. 30, 2013 item
Commitments And Contingencies [Abstract]
Off-track betting payment to the IMR Fund, L.P., per operating year	$ 700,000
Off-track betting payment to the IMR Fund, L.P. as percentage of net pretax profit	20.00%
Earn out note conditions	2
Number of years defined by off-track betting agreement	5 years
Minimum number of payments to IMR Fund, L.P.	5
Maximum term for first payment to be made to IMR Fund, L.P.	90 days
Maximum term for remaining payments to be made to the IMR Fund, L.P.	90 days
Remaining years, payments to the IMR Fund, L.P.	4 years
Approximate cost of future racetrack enhancements	$ 2,225,000

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Condensed Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance	$ 4,468	$ 27,773
Land, buildings and equipment, accumulated depreciation	$ 21,413,966	$ 22,021,944
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	4,170,318	4,147,743
Common stock, shares outstanding	4,170,318	4,147,743

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Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2013

Stock Based Compensation [Abstract]

Share-Based Compensation, Granted

	Six Months Ended
	June 30, 2013				June 30, 2012
			Weighted				Weighted
			Average				Average
			Fair Value				Fair Value
	Grant		Per Share		Grant		Per Share
Board restricted stock		18,290	$	10.52		11,820	$	12.69
Total shares		18,290				11,820

Stock Options Activity

A summary of stock option activity as of June 30, 2013 and changes during the six months then ended is presented below: 

								Weighted
					Weighted			Average
					Average			Remaining			Aggregate
		Number of			Exercise			Contractual			Grant Date
Stock Options	Shares			Price			Term			Fair Value
Outstanding at January 1, 2013			292,267		$	10.13
Granted			-			-
Exercised			(1,419)		$	6.40
Expired/Forfeited			(15,000)		$	13.86
Outstanding at June 30, 2013			275,848		$	9.95			5.1 Years		$	2,744,613
Exercisable at June 30, 2013			255,973		$	10.08			5.0 Years		$	2,580,048

A summary of stock option activity as of June 30, 2012 and changes during the six months then ended is presented below: 

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Grant Date
Stock Options	Shares		Price		Term		Fair Value
Outstanding at January 1, 2012		318,002	$	9.21
Granted		-		-
Exercised		(19,750)	$	7.23
Expired/Forfeited		-		-
Outstanding at June 30, 2012		298,252	$	10.06		5.8 Years	$	3,000,852
Exercisable at June 30, 2012		246,752	$	10.57		5.6 Years	$	2,607,492

Stock Appreciation Rights Valuation Assumptions

	June 30, 2013
Expected dividend yield		0.00	%
Expected weighted-average volatility		48.6	%
Risk-free interest rate		2.43	%
Expected term of SARs (in years)		9.50

Stock Appreciation Rights Award Activity

	SARs		Fair Value (*)
Non-vested SARs at December 31, 2012		148,500	$	5.24
Granted		—		—
Vested		(16,500)	$	5.03
Cancellations		—		—
Non-vested SARs at June 30, 2013		132,000	$	5.03

*  Weighted-average

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Condensed Consolidated Statements Of Cash Flows (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating Activities:
Net income	$ 484,329	$ 365,968
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	893,280	884,580
Stock-based compensation expense	140,563	91,558
Increase (decrease) in deferred income taxes	466,400	(293,300)
Tax expense (benefit) from exercise of stock options and restricted stock issuance	4,319	(27,289)
Gain on disposal of assets	(1,752)
Changes in operating assets and liabilities:
Increase in restricted cash	(1,811,069)	(1,369,351)
Increase in accounts receivable	(370,725)	(318,870)
Increase in other current assets	(734,543)	(389,749)
Increase in income taxes receivable	(549,105)	(213,721)
Increase in accounts payable and accrued wages and payroll taxes	3,752,147	2,899,089
(Decrease) increase in Card Casino accruals	(430,482)	22,994
Increase in stock appreciation rights	108,254	117,226
Increase in accrued property taxes	785	2,977
Increase in payable to horsepersons	21,135	46,506
Decrease in due to MHBPA	(313,042)	(53,116)
Net cash provided by operating activities	1,660,494	1,765,502
Investing Activities:
Additions to buildings and equipment	(3,397,642)	(753,553)
Proceeds from sale of assets	6,700
Purchase of investments	(386)	(957)
Net cash used in investing activities	(3,391,328)	(754,510)
Financing Activities
Common stock repurchases	(7,509)
Proceeds from issuance of common stock	39,113	183,011
Tax (expense) benefit from exercise of stock options and restricted stock issuance	(4,319)	27,289
Net cash provided by financing activities	27,285	210,300
Net (decrease) increase in cash and cash equivalents	(1,703,549)	1,221,292
Cash and cash equivalents at beginning of period	9,384,983	8,268,779
Cash and cash equivalents at end of period	7,681,434	9,490,071
Supplemental disclosure of noncash investing and financing activities:
Additions to buildings and equipment funded through accounts payable	101,477	88,999
Dividend declared		1,035,475
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$ 438,000	$ 856,000

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Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2013	Dec. 31, 2012
CURRENT ASSETS
Cash and cash equivalents	$ 7,681,434	$ 9,384,983
Restricted cash	3,416,858	1,605,789
Short-term investments	203,581	203,195
Accounts receivable, net of allowance of $4,468 and $27,773, respectively	783,165	412,440
Inventory	293,806	212,072
Prepaid expenses	1,141,808	488,999
Deferred income taxes	339,400	425,100
Income taxes receivable	548,532	3,746
Due from Minnesota horsemen associations		16,829
Total current assets	14,408,584	12,753,153
LONG-TERM ASSETS
Deposits	26,400	26,400
Land, buildings and equipment, net of accumulated depreciation of $21,413,966 and $22,021,944, respectively	24,697,288	22,119,959
Total assets	39,132,272	34,899,512
CURRENT LIABILITIES
Accounts payable	6,651,723	2,785,534
Card Casino accruals	1,049,187	1,479,669
Accrued wages and payroll taxes	998,293	1,034,421
Due to MHBPA	218,429	548,300
Accrued property taxes	649,972	649,187
Payable to horsepersons	44,510	23,375
Total current liabilities	9,612,114	6,520,486
LONG-TERM LIABILITIES
Deferred income taxes	1,635,000	1,254,300
Stock appreciation rights	348,042	239,788
Total long-term liabilities	1,983,042	1,494,088
COMMITMENTS AND CONTINGENCIES (NOTE 6)
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 10,000,000 shares authorized, 4,170,318 and 4,147,743, respectively, shares issued and outstanding	41,703	41,477
Additional paid-in capital	17,075,141	16,903,245
Retained earnings	10,420,272	9,940,216
Total stockholders' equity	27,537,116	26,884,938
Total liabilities and stockholders' equity	$ 39,132,272	$ 34,899,512

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Operating Segments (Reconciliation Of Revenues) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting, Revenue Reconciling Item [Line Items]
Total consolidated net revenues	$ 13,280,950	$ 11,964,084	$ 22,425,518	$ 21,572,794
Reportable Segment [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total consolidated net revenues			23,420,000	22,555,000
Elimination Of Intersegment [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total consolidated net revenues			$ (994,000)	$ (982,000)

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Stock Based Compensation (Stock Appreciation Rights Award Activity) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Stock Based Compensation [Abstract]
Non-vested SARs, Beginning Balance	148,500
Granted, SARs
Vested, SARs	(16,500)
Cancellations, SARs
Non-vested SARs, Ending Balance	132,000
Non-vested SARs, Fair Value, Beginning Balance	$ 5.24	[1]
Granted, Fair Value		[1]
Vested, Fair Value	$ 5.03	[1]
Cancellations, Fair Value		[1]
Non-vested SARs, Fair Value, Ending Balance	$ 5.03	[1]

[1] Weighted-average

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Summary Of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2013

Summary Of Significant Accounting Policies [Abstract]

Business

Business – Canterbury Park Holding Corporation (the “Company”) was incorporated under the laws of Minnesota and acquired land and buildings to conduct pari-mutuel horse racing operations (the “Racetrack”) in March 1994.  The Racetrack is located in Shakopee, Minnesota, approximately 25 miles southwest of downtown Minneapolis.  In May 1994, we commenced year-round horse racing simulcast operations and hosted the first annual live race meet during the summer of 1995.  Our live racing operations are a seasonal business as we host live race meets each year from May until September.  We earn additional pari-mutuel revenue by televising our live racing to out-of-state racetracks around the country.  Canterbury Park’s Card Casino operates 24 hours a day, seven days a week and is limited by Minnesota State law to a maximum of 80 tables.  Prior to May 4, 2012, the Company was limited to a maximum of 50 tables.  The Card Casino currently offers a variety of poker and table games.  Our three largest sources of revenues, Card Casino operations, pari-mutuel operations and concessions sales, generate cash revenues.  We also derive revenues from related services and activities, such as advertising, parking and publication sales and from other entertainment events and activities held at the Racetrack.

Revenue Recognition

Revenue Recognition – Our revenues are derived primarily from the operations of a Card Casino, pari-mutuel wagering on simulcast and live horse races, concession sales, and related activities.  Collection revenue from Card Casino operations, a set percentage of wagers, is recognized at the time that the wagering process is complete.  Pari-mutuel revenues are recognized upon occurrence of the live race that is presented for wagering and after that live race is made official by the respective state’s racing regulatory body.  Revenues related to concession and publication sales and parking and admission fees are recognized as revenue when the service has been performed or the product has been delivered.  All sales taxes are presented on a net basis and are excluded from revenue.

Estimates

Estimates – The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.

Cash And Cash Equivalents

Cash and Cash Equivalents – Cash and cash equivalents include all investments with original maturities of three months or less or which are readily convertible into known amounts of cash and are not legally restricted.  Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Restricted Cash

Restricted Cash – Restricted cash represents refundable deposits and amounts due to horsemen for purses, stakes and awards, and amounts accumulated in card game progressive jackpot pools, the player pool and poker promotional fund to be used to repay card players in the form of promotions, giveaways, prizes, or by other means.

Short-Term Investments

Short-term Investments – Securities are classified as held to maturity when the Company has the positive intent and ability to hold them to maturity, and are measured at amortized cost.  At June 30, 2013 and December 31, 2012, all investments were classified as held-to-maturity.  The Company continually reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary.  If the decline in fair value is judged to be other than temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in earnings.  Short-term investments consist of certificates of deposits at June 30, 2013 and December 31, 2012.  Amortized cost approximated fair value for both periods.

Accounts Receivable

Accounts Receivable – Accounts receivable are initially recorded for amounts due from other tracks for simulcast revenue, net of amounts due to other tracks, and for amounts due from customers related to special events.  Credit is granted in the normal course of business without collateral.  Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments.  Accounts that are outstanding longer than the contractual terms are considered past due.  When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our day-to-day knowledge of specific customers.  We write off accounts receivable when they become uncollectible.  Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in other operating expenses in our consolidated statements of operations.

Inventory

Inventory – Inventory consists primarily of food and beverages, small wares and supplies and retail goods and are recorded at the lower of cost (first-in, first-out) or market. 

Unredeemed Pari-Mutuel Tickets

Unredeemed Pari-mutuel Tickets – The Company records a liability for winning tickets and vouchers upon the completion of a race and when a voucher is printed, respectively.  As uncashed winning tickets and vouchers are redeemed, this liability is reduced for the respective cash payment.  We recognize revenue associated with the uncashed winning tickets and vouchers when the likelihood of redemption, based on historical experience, is remote.  While we continue to honor all winning tickets and vouchers presented for payment, management may determine the likelihood of redemption to be remote due to the length of time that has elapsed since the ticket was issued.  In these circumstances, if management also determines there is no requirement for remitting balances to government agencies under unclaimed property laws, uncashed winning tickets and vouchers may then be recognized as revenue in our Condensed Consolidated Statements of Operations.  During the quarter ended June 30, 2013, the Company reevaluated the likelihood of redemption relating to outstanding vouchers and through this assessment, the Company decreased the projected redemption rate.  The Company has determined that this adjustment to the likelihood of redemption relating to vouchers is a change in accounting estimate and has accounted for the change prospectively; i.e. the accounting change impacts interim reporting periods within fiscal year 2013 and future periods.  For the three months ended June 30, 2013, the change in accounting estimate decreased our liability for outstanding pari-mutuel vouchers and increased Pari-mutuel Revenue in our Condensed Consolidation Statements of Operations for the period by approximately $412,286 (pre-tax difference), increasing Income From Operations by this amount as well.  Net Income increased approximately $239,150 (after taking income taxes into account), or by approximately $0.06 earnings per basic and diluted common share. 

Promotional Allowances

Promotional Allowances – The Company offers certain promotional allowances at no charge to patrons who participate in our player rewards program.  The retail value of these promotional items is shown as a deduction from total revenues on the Company’s consolidated statements of operations.

Due To Minnesota Horsemen's Benevolent And Protective Association, Inc. ("MHBPA")

Due to Minnesota Horsemen’s Benevolent and Protective Association, Inc. (“MHBPA”) – The Minnesota Pari-mutuel Horse Racing Act specifies that the Company is required to segregate a portion of funds (recorded as purse expense in the statements of operations), received from Card Casino operations and wagering on simulcast and live horse races, for future payment as purses for live horse races or other uses of the horsepersons’ associations.  Pursuant to an agreement with the MHBPA, the Company transferred into a trust account or paid directly to the MHBPA, approximately $2,925,000 and $2,575,000 for the three-month periods ending June 30, 2013 and 2012, respectively related to thoroughbred races.  Minnesota Statutes specify that amounts transferred into the trust account are the property of the trust and not of the Company.

Impairment Of Long-Lived Assets

Impairment of Long-Lived Assets – Management of the Company periodically reviews the carrying value of property and equipment for potential impairment by comparing the carrying value of these assets with their related expected undiscounted future net cash flows.  Should the sum of the related expected future net cash flows be less than the carrying value, management will determine whether an impairment loss should be recognized.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset.  Management has determined that no impairment of these assets exists at June 30, 2013.

Advertising And Marketing

Advertising and Marketing – Advertising and marketing costs are charged to expense as incurred.  The related amounts are presented separately in the Company’s consolidated statements of operations.

Land, Buildings, And Equipment

Land, Buildings, and Equipment – Land, buildings, equipment, and building improvements are capitalized at a level of $1,000 or greater and are recorded at cost.  Repair and maintenance costs are charged to operations when incurred.  Furniture, fixtures, and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 – 7 years, while buildings are depreciated over 15 – 39 years.  Building improvements are amortized using the straight-line method over the useful life of the assets.

Card Casino Accruals

Card Casino Accruals – Minnesota law allows the Company to collect amounts from patrons to fund progressive jackpot pools in the Card Casino.  These amounts, along with amounts earned by the player pool, promotional pools and the outstanding chip liability, are accrued as short-term liabilities at each balance sheet date.

Income Taxes

Income Taxes –  Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to reverse.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Interest and penalties associated with uncertain income tax positions are presented in income tax expense.  For the six months ended June 30, 2013 and 2012, we did not recognize any expense related to interest and penalties.  Additionally, we do not have any amounts accrued at June 30, 2013 for the payment of interest and penalties.

Net Income Per Share

Net Income Per Share – Basic net income per common share is based on the weighted average number of common shares outstanding during each year.  Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding.  The Company’s only potential common shares outstanding are stock options.

Fair Value Of Financial Instruments

FairValues of Financial Instruments – Due to the current classification of all financial instruments of the Company and given the short-term nature of the related account balances, carrying amounts reported in the consolidated balance sheets approximate fair value.

Stock Based Employee Compensation

Stock Based Employee Compensation – The Company accounts for share based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized as expense over the requisite service period (generally the vesting period).  The estimated fair value of each option is calculated using the Black-Scholes option-pricing model.

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Operating Segments (Reconciliation Of Income Before Income Taxes) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total consolidated income before income taxes	$ 332,895	$ (291,125)	$ 839,624	$ 714,948
Reportable Segment [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total consolidated income before income taxes			1,294,000	1,204,000
Elimination Of Intersegment [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total consolidated income before income taxes			$ (454,000)	$ (489,000)

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Operating Segments (Tables)

6 Months Ended

Jun. 30, 2013

Operating Segments [Abstract]

Schedule Of The Company's Operating Segments

	Six Months Ended June 30, 2013
	Horse Racing			Card Casino			Concessions			Total
Net revenues from external customers		$	6,759		$	12,880		$	2,787		$	22,426
Intersegment revenues			249			-			745			994
Net interest income			2			-			-			2
Depreciation			554			270			69			893
Segment (loss) income before income taxes			(1,080)			2,291			83			1,294
		At June 30, 2013
Segment Assets		$	36,637		$	1,896		$	13,083		$	51,616

	Six Months Ended June 30, 2012
	Horse Racing			Card Casino			Concessions			Total
Net revenues from external customers		$	6,246		$	12,593		$	2,734		$	21,573
Intersegment revenues			249			-			733			982
Net interest income			3			-			-			3
Depreciation			526			294			65			885
Segment (loss) income before income taxes			(1,130)			2,003			331			1,204
		At December 31, 2012
Segment Assets		$	31,950		$	2,337		$	12,538		$	46,825

Reconciliation Of Revenues

	Six Months Ended June 30,
	2013		2012
Revenues
Total net revenue for reportable segments	$	23,420	$	22,555
Elimination of intersegment revenues		(994)		(982)
Total consolidated net revenues	$	22,426	$	21,573

Reconciliation Of Income Before Income Taxes

Income before income taxes
Total segment income before income taxes	$	1,294	$	1,204
Elimination of intersegment income before income taxes		(454)		(489)
Total consolidated income before income taxes	$	840	$	715

Reconciliation Of Assets

	June 30,		December 31,
	2013		2012
Assets
Total assets for reportable segments	$	51,616	$	46,825
Elimination of intercompany receivables		(12,484)		(11,925)
Total consolidated assets	$	39,132	$	34,900

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Cooperative Marketing Agreement

6 Months Ended

Jun. 30, 2013

Cooperative Marketing Agreement [Abstract]

Cooperative Marketing Agreement

7.  COOPERATIVE MARKETING AGREEMENT 

On June 4, 2012, the Company entered into a Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Community (“SMSC”).  The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s horse industry.  Under the terms of the CMA, the SMSC paid the horsemen  $2.7 million in June of 2012 for purse enhancements in 2012 and $5.3 million in February of 2013 to be used for purse enhancements.  After 2013, the SMSC plans to contribute the additional amounts listed below.   

In addition, the Company and the SMSC have also agreed in the CMA to partner in joint marketing efforts for their mutual benefit, including signage, joint promotions, player benefits, cooperative poker tournaments, and events.  Under the CMA, the SMSC paid the Company  $300,000in June of 2012 marketing purposes and  $600,000 in February of 2013,  and, after 2013, will pay the additional amounts listed below.    

After 2013, the SMSC has agreed to make the following purse enhancement and marketing payments in the years 2014 through 2022: 

Year	Horsemen Purse Enhancement	Canterbury Park Marketing Payment
2014	5,840,000	660,000
2015	6,434,000	726,000
2016	7,087,400	798,600
2017	7,806,140	878,460
2018	8,000,000	900,000
2019	8,000,000	900,000
2020	8,000,000	900,000
2021	8,000,000	900,000
2022	8,000,000	900,000

The Company will not have any financial interest in any part of any purse enhancement payment.  Therefore, purse enhancement payments will have no impact on the Company’s financial statements.

The amounts earned from the marketing payments will be recorded as a component of other revenue and the related expenses will be recorded as a component of marketing and advertising expense in the Company’s financial statements.  For the six months ended June 30, 2013, the Company recorded $164,572 in revenues and incurred $164,572 in expenses related to the marketing payment.  The excess of amounts received over revenues is reflected as deferred revenue which is included in accounts payable on the consolidated balance sheet.

As part of the CMA, and pursuant to a Stock Appreciation Rights Agreement (the “SAR Agreement”) dated June 14, 2012, the Company issued stock appreciation rights to the SMSC.  The SAR Agreement granted rights to the SMSC to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties.  Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30.  Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013.  The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price.  The SAR Agreement and all rights granted expire on December 31, 2022.  The liability related to these stock appreciation rights is recorded as a long-term liability and the Company recognizes the income or expense related to the fluctuation in the value of the stock appreciation rights against the revenues recorded relating to the marketing payment due to the nature of the agreement.  Any excess expenses will be recognized as a component of other operating expenses.  For the six months ended June 30, 2013, the Company recognized $108,254 of expense related to these stock appreciation rights, of which $108,254 was recorded as an offset to revenue.  In the future, changes in the fair value of these stock appreciation rights will increase or decrease the stock appreciation rights liability, and the Company will recognize an additional offset to revenue or other operating expense related to these changes.

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Stock Based Compensation

6 Months Ended

Jun. 30, 2013

Stock Based Compensation [Abstract]

Stock Based Compensation

2.   STOCK BASED COMPENSATION

Stock based compensation is recorded at fair value as of the date of grant and included in the salaries and benefits expense line item on the consolidated statements of operations and amounted to $140,563 and$91,558during the six months ended June 30, 2013 and 2012, respectively

Board of Director Restricted Stock Grants

Pursuant to Board action taken on April 15, 2011 and shareholder approval on June 2, 2011, the Company’s Stock Plan was amended to authorize annual grants of restricted stock or stock options, or both, as determined by the Board.  Pursuant to the amended Stock Plan, on June 7, 2012, 2,364 shares of restricted stock were granted to each of the five non-employee members of the Board of Directors.  The restricted stock will vest100% after one year and will be subject to restrictions on resale for an additional year.  The compensation cost related to this total restricted stock grant of 11,820 shares for the three months ended June 30, 2013 was  $24,999.  As of June 30, 2013, there was no unrecognized compensation cost related to this restricted stock grant.

Additionally, on January 4, 2013, 1,250 shares of restricted stock were granted to a newly named non-employee member of the Board of Directors.  The restricted stock will vest100% after one year and will besubject to restrictions on resale for an additional year.  The compensation cost related to this restricted stock grant of 1,250 shares for the three months ended June 30, 2013 was $3,125.  As of June 30, 2013, there was $6,250 of total unrecognized compensation cost related to this restricted stock grant which is expected to be recognized over 0.5 years.

Finally, on May 30, 2013, 2,840 shares of restricted stock were granted to each of the six non-employee members of the Board of Directors.  The restricted stock will vest100% after one year and will besubject to restrictions on resale for an additional year.  The compensation cost related to this total restricted stock grant of 17,040 shares for the three months ended June 30, 2013 was$14,995.  As of June 30, 2013, there was $164,947 of total unrecognized compensation cost related to this restricted stock grant which is expected to be recognized over 0.9 years.

Employee Stock Option and Deferred Stock Award Grants

On February 25, 2010, 86,500 incentive stock options were granted to employees with an exercise price equal to the market price on the date of grant of $8.28.  The options vest over a 42-month period and expire in ten years.  The compensation cost associated with this grant of employee options is $282,355 to be recognized as expense over the 42-month vesting period.  The compensation cost related to these options is included in salaries and benefits expense for the six months ended June 30, 2013 and 2012 was $35,294.  As of June 30, 2013, there was $11,765 of total unrecognized compensation cost related to these stock options which is expected to be recognized over 0.2 years.

Additionally, on December 13, 2012, 20,500 shares of deferred stock awards were granted to employees with a price per share equal to the market price on the date of grant of $9.84.  The awards vest ratably over a four-year period.  The compensation cost associated with this grant of employee awards is $172,200 to be recognized as expense over the four-year vesting period.  The compensation cost related to these awards is included in salaries and benefits expense for the six months ended June 30, 2013 was $21,525.  As of June 30, 2013, there was $148,841 of total unrecognized compensation cost related to these deferred stock awards which is expected to be recognized over 3.5 years.

The number of shares that may be issued pursuant to restricted stock granted and the weighted average fair value during the periods presented were: 

	Six Months Ended
	June 30, 2013				June 30, 2012
			Weighted				Weighted
			Average				Average
			Fair Value				Fair Value
	Grant		Per Share		Grant		Per Share
Board restricted stock		18,290	$	10.52		11,820	$	12.69
Total shares		18,290				11,820

A summary of stock option activity as of June 30, 2013 and changes during the six months then ended is presented below: 

								Weighted
					Weighted			Average
					Average			Remaining			Aggregate
		Number of			Exercise			Contractual			Grant Date
Stock Options	Shares			Price			Term			Fair Value
Outstanding at January 1, 2013			292,267		$	10.13
Granted			-			-
Exercised			(1,419)		$	6.40
Expired/Forfeited			(15,000)		$	13.86
Outstanding at June 30, 2013			275,848		$	9.95			5.1 Years		$	2,744,613
Exercisable at June 30, 2013			255,973		$	10.08			5.0 Years		$	2,580,048

A summary of stock option activity as of June 30, 2012 and changes during the six months then ended is presented below: 

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Grant Date
Stock Options	Shares		Price		Term		Fair Value
Outstanding at January 1, 2012		318,002	$	9.21
Granted		-		-
Exercised		(19,750)	$	7.23
Expired/Forfeited		-		-
Outstanding at June 30, 2012		298,252	$	10.06		5.8 Years	$	3,000,852
Exercisable at June 30, 2012		246,752	$	10.57		5.6 Years	$	2,607,492

Employee Stock Ownership Plan

Prior to 2008, the Company contributed shares of its common stock to its Employee Stock Ownership Plan (the “ESOP”).  However, no contributions have been made from January 1, 2008 to date, and the Company has not taken any action to reinstate contributions to the ESOP.  During the first quarter of 2013, the Company’s Board of Directors approved an action to combine the ESOP with the 401(k) Plan to create a KSOP Plan.  This KSOP Plan will allow the Company to use Company stock to match contributions from its employees should it so choose.  This combination became effective on July 15, 2013.

Employee Stock Purchase Plan

On April 3, 1995, the Board of Directors adopted an Employee Stock Purchase Plan (the “ESPP”).  Pursuant to Board action taken in September 2011, the ESPP was amended so that stock is issued in three-month phases.  The plan issued 1,574 shares during the second quarter of 2013 and 2,096 shares during the second quarter of 2012.  The ESPP has issued a total of 256,415 shares since its inception.  Pursuant to Board action taken on June 2, 2012, and effective during the third quarter of 2012, the discount offered to employees as part of the ESPP was raised 5% to 10%.

Stock Appreciation Rights (“SARs”)

As part of the Cooperative Marketing Agreement (the “Agreement”) discussed in Note 7, on June 14, 2012, the Company signed a Stock Appreciation Rights Agreement (the “SAR Agreement”) and issued SARs to non-employees.  The SAR Agreement granted rights to non-employees to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties.  Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30.  Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013.  The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price.  SARs have no effect on dilutive shares or shares outstanding as any appreciation of the Company’s common stock value over the grant price is paid in cash and not in common stock.  The SAR Agreement and all rights granted expire on December 31, 2022.  

The fair value of SARs is revalued (mark-to-market) each reporting period using the Black-Scholes valuation model based on the Company’s period-end stock price.  The expected term of the SARs granted is based on the contractual term.  Expected volatility is based on the historical volatility of the Company’s stock for the length of time corresponding to the expected term of the SARs.  The expected dividend yield is based on the Company’s anticipated dividend payments.  The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the reporting date for the length of time corresponding to the expected term of the SARs.   

The following weighted-average assumptions were used in calculating the fair value of SARs during the six-month period ended June 30, 2013, using the Black-Scholes valuation model:

	June 30, 2013
Expected dividend yield		0.00	%
Expected weighted-average volatility		48.6	%
Risk-free interest rate		2.43	%
Expected term of SARs (in years)		9.50

There were no exercises during the three and six-month period ended June 30, 2013.  The total fair value of SARs at June 30, 2013 was $348,042. 

Changes to the Company’s non-vested SARs during the six-month period ended June 30, 2013,  are as follows:  

	SARs		Fair Value (*)
Non-vested SARs at December 31, 2012		148,500	$	5.24
Granted		—		—
Vested		(16,500)	$	5.03
Cancellations		—		—
Non-vested SARs at June 30, 2013		132,000	$	5.03

*  Weighted-average

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Cooperative Marketing Agreement (Narrative) (Details) (USD $)	1 Months Ended		3 Months Ended		6 Months Ended		0 Months Ended	6 Months Ended
	Feb. 28, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 14, 2012 Stock Appreciation Rights (SARs) [Member] item	Jun. 30, 2013 Stock Appreciation Rights (SARs) [Member] item
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Obligation under the Agreement to enhance purses for live horse racing meet due current	$ 5,300,000	$ 2,700,000
Obligation under Agreement to support joint marketing activities due current	600,000	300,000
Revenues related to marketing payment					164,572
Expenses related to marketing payment					164,572
Share-based compensation, other than options granted							165,000
Benefit from appreciation in the value of common stock, per share							$ 14.30
Percentage of the Rights vested							10.00%
Number of the Rights vested							16,500
Number of remaining Rights vest per year							16,500	16,500
Stock based compensation expense					140,563	91,558		108,254
Expense recorded as an offset to revenue			$ 13,280,950	$ 11,964,084	$ 22,425,518	$ 21,572,794		$ 108,254

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Stock Based Compensation (Narrative) (Details) (USD $)	3 Months Ended			6 Months Ended		219 Months Ended	0 Months Ended	3 Months Ended	6 Months Ended	0 Months Ended	3 Months Ended	6 Months Ended	0 Months Ended	3 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended		0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended
	Jun. 30, 2013	Sep. 30, 2012	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 07, 2012 5 Non-Employee Members Of Board Of Directors [Member] item	Jun. 30, 2013 5 Non-Employee Members Of Board Of Directors [Member]	Jun. 30, 2013 5 Non-Employee Members Of Board Of Directors [Member]	Jan. 04, 2013 Newly Named Non-Employee Member Of Board Of Directors [Member]	Jun. 30, 2013 Newly Named Non-Employee Member Of Board Of Directors [Member]	Jun. 30, 2013 Newly Named Non-Employee Member Of Board Of Directors [Member]	May 30, 2013 6 Non Employee Members Of Board Of Directors [Member] item	Jun. 30, 2013 6 Non Employee Members Of Board Of Directors [Member]	Jun. 30, 2013 6 Non Employee Members Of Board Of Directors [Member]	Feb. 25, 2010 Employee Stock Option [Member]	Jun. 30, 2013 Employee Stock Option [Member]	Jun. 30, 2012 Employee Stock Option [Member]	Dec. 13, 2012 Employee Deferred Stock Award [Member]	Jun. 30, 2013 Employee Deferred Stock Award [Member]	Jun. 14, 2012 Stock Appreciation Rights (SARs) [Member] item	Jun. 30, 2013 Stock Appreciation Rights (SARs) [Member] item
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense				$ 140,563	$ 91,558											$ 282,355			$ 172,200			$ 108,254
Share-based compensation, other than options granted							2,364			1,250			2,840						20,500		165,000
Stock-based compensation, options granted, number of nonemployee members							5						6
Restricted stock, percentage vested									100.00%			100.00%			100.00%
Share-based compensation, vesting period									1 year			1 year			1 year	42 months			4 years
Share-based compensation shares available for grant	18,290		11,820	18,290	11,820	18,290		11,820	11,820		1,250	1,250		17,040	17,040
Share-based compensation nonemployee, cost								24,999			3,125			14,995
Unrecognized compensation costs								0	0		6,250	6,250		164,947	164,947		11,765			148,841
Recognition period for unrecognized compensation costs												6 months			10 months 24 days		2 months 12 days			3 years 6 months
Stock options granted																86,500
Granted exercise price																$ 8.28			$ 9.84
Share-based compensation, expiration period																10 years
Compensation cost included in salaries and benefits expense																	35,294	35,294		21,525
Shares issued for Employee Stock Purchase Plan	1,574		2,096			256,415
Percentage of raised discount offered to employees as part of the ESPP		5.00%
Percentage of discount offered to employees as part of the ESPP				10.00%
Benefit from appreciation in the value of common stock, per share																					$ 14.30
Percentage of the Rights vested																					10.00%
Number of the Rights vested																					16,500
Number of remaining Rights vest per year																					16,500	16,500
Total fair value of SARs vested																						$ 348,042

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Earnings Per Share Computations (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share Computations [Abstract]

Schedule Of Earnings Per Share Reconciliation

	Three		Three		Six		Six
	Months		Months		Months		Months
	Ended		Ended		Ended		Ended
	June 30,		June 30,		June 30,		June 30,
	2013		2012		2013		2012
Net income (loss) (numerator) amounts used for basic and diluted per share computations:	$	193,248	$	(166,536)	$	484,329	$	365,968
Weighted average shares (denominator) of common stock outstanding:
Basic		4,157,305		4,115,771		4,153,819		4,113,901
Plus dilutive effect of stock options		25,422		-		19,801		48,193
Diluted		4,182,727		4,115,771		4,173,620		4,162,094
Net income (loss) per common share:
Basic	$	.05	$	(.04)	$	.12	$	.09
Diluted		.05		(.04)		.12		.09

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Stock Based Compensation (Stock Appreciation Rights Valuation Assumptions) (Details) (Stock Appreciation Rights (SARs) [Member])	6 Months Ended
	Jun. 30, 2013
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	0.00%
Expected weighted-average volatility	48.60%
Risk-free interest rate	2.43%
Expected term of SARs (in years)	9 years 6 months

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Stock Based Compensation (Share-Based Compensation, Granted) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant	18,290	11,820
Board Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant	18,290	11,820
Weighted Average Fair Value Per Share	$ 10.52	$ 12.69

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Document And Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 13, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	CANTERBURY PARK HOLDING CORP
Entity Central Index Key	0000926761
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,172,321

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Stock Based Compensation (Stock Options Activity) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Stock Based Compensation [Abstract]
Outstanding at beginning of year, Number of Shares	292,267	318,002
Exercised, Number of Shares	(1,419)	(19,750)
Expired/Forfeited, Number of Shares	(15,000)
Outstanding at end of year, Number of Shares	275,848	298,252
Exercisable, Number of Shares	255,973	246,752
Outstanding at beginning of year, Weighted Average Exercise Price	$ 10.13	$ 9.21
Exercised, Weighted Average Exercise Price	$ 6.40	$ 7.23
Expired/Forfeited, Weighted Average Exercise Price	$ 13.86
Outstanding at end of year, Weighted Average Exercise Price	$ 9.95	$ 10.06
Exercisable, Weighted Average Exercise Price	$ 10.08	$ 10.57
Outstanding, Weighted Average Remaining Contractual Term	5 years 1 month 6 days	5 years 9 months 18 days
Exercisable, Weighted Average Remaining Contractual Term	5 years	5 years 7 months 6 days
Outstanding, Aggregate Grant Date Fair Value	$ 2,744,613	$ 3,000,852
Exercisable, Aggregate Grant Date Fair Value	$ 2,580,048	$ 2,607,492